16-8-2023 (KUALA LUMPUR) Kuala Lumpur bore witness to a startling revelation as the High Court uncovered details about a pivotal moment in the 1Malaysia Development Bhd (1MDB) saga. Former Bank Negara governor, Tan Sri Dr Zeti Akhtar Aziz, testified that the central bank had categorically rejected a significant loan application made by 1MDB in 2014. The application sought permission to secure approximately RM4.9 billion from offshore sources, a move that was ultimately thwarted due to the company’s towering debt levels.
During her testimony, Zeti Akhtar Aziz divulged that the rejection stemmed from Bank Negara’s concerns over 1MDB’s substantial debt load. The company’s financial position prompted the central bank to decline their request. In a desperate bid, 1MDB appealed the rejection through internal channels, hoping for a reversal of fortunes. However, this appeal met a similar fate and was subsequently turned down.
The application, which sought billions in ringgit funds, was submitted on June 3, 2014, approximately a year before foreign financial regulators raised suspicions of potential misappropriation of 1MDB’s funds. Zeti Akhtar Aziz clarified that Bank Negara could have potentially reconsidered 1MDB’s application if the company had demonstrated that it held overseas funds earmarked for debt repayment. However, the central bank encountered a significant stumbling block – 1MDB failed to furnish any evidence of such overseas funds, as they simply did not exist.
The former governor, while addressing the court, admitted to her inability to ascertain whether 1MDB had pursued an appeal with the Finance Ministry. This ministry was then under the jurisdiction of Datuk Seri Najib Razak, who concurrently held the positions of prime minister and finance minister. Zeti Akhtar Aziz asserted that Bank Negara had not received any directives or communications from Najib concerning the loan application issue.
Amidst these revelations, the court also unveiled the fact that 1MDB incurred a fine of RM15 million from Bank Negara. The fine was levied after the company’s failure to repatriate funds held abroad. In response, 1MDB paid the imposed fine in full on May 25, 2016. The payment of the fine essentially served as an admission by 1MDB that it lacked any investments or monetary holdings overseas.
The ongoing trial revolves around Datuk Seri Najib Razak, who faces a total of 25 charges. Among these charges are allegations of abuse of power, which purportedly resulted in financial gains amounting to RM2.28 billion. Additionally, Najib stands accused of 21 charges related to money laundering, involving the same substantial sum.
