KUALA LUMPUR: The board of directors (BOD) of 1Malaysia Development Bhd (1MDB) was duped by the company’s management when it misled the board into believing that "money was coming back" to the sovereign wealth fund, the High Court heard.

       Former 1MDB non-executive director Tan Sri Ismee Ismail agreed to suggestions by lead counsel Tan Sri Muhammad Shafee Abdullah that the management of 1MDB had executed “the most cunning, the most devious, the most diabolical” scheme in stealing millions of dollars from 1MDB.

       Muhammad Shafee, who represented Datuk Seri Najib Razak in the trial, highlighted a briefing by former chief financial officer (CFO) Azmi Tahir in 1MDB board meeting on Oct 20, 2014, where Azmi had said that a total of US$870mil (RM3.66bil) had been redeemed as of mid-October 2014 and another US$300mil (RM1.26bil) would have been redeemed within the next few days.

       Muhammad Shafee: You see how Azmi lied to the board. What he did was, all this money purportedly went into Brazen Sky Ltd (a company incorporated in the British Virgin Islands by fugitive financier Low Taek Jho specifically to repatriate 1MDB’s investment in PetroSaudi Oil Services Ltd (PSOSL) to Malaysia). He omitted that the money would return to Aabar (Investments PJS Ltd) and then (he) claims ‘this is the money that has been returned’. This is the biggest fraud ever pulled. But of course, 1MDB directors would not know this aspect because you have to be dependent on your management’s honesty. Now that you know the truth, what is your comment?

       Ismee: I guess the same thing I had said earlier. Bulan puasa, tak sedap nak cakap. (Fasting month, not good to speak ill of others).

       Muhammad Shafee: You still have to tell the truth during bulan puasa. (court laughs).

       Ismee: Your honour, I have said this even in November last year when he (Muhammad Shafee) asked the same thing. I would still say the same thing. The board was misled.

       Muhammad Shafee: When Azmi did the briefing, the board was happy because (it seemed that) the money was returning, right?

       Ismee: Yes, of course. Of course.

       The witness was also shown a flow chart, which Muhammad Shafee described as a “roller-coaster” with seven money trail cycles.

       The monies originated from a US$975mil (RM4.11bil) loan from Deutsche Bank that was used to show that there was repatriation to 1MDB.

       From the chart, US$223.33mil (RM940.33mil) and US$457.98mil (RM1.93bil) of the loan were pumped into Aabar Investments PJS Ltd – otherwise known as the ‘fake Aabar’ – and went through several transactions between Lambasa Global Opportunity Fund, Bridge Global Absolute Return Fund SPC, Brazen Sky, 1MDB Global Investments Ltd and Universal Ventures Fund SCC.

       However, the chart showed that huge sums of the monies returned to Aabar Investments PJS Ltd in five cycles.

       Muhammad Shafee said 1MDB borrowed the money from Deutsche Bank to mislead the board that that was the money repatriated but the monies were sent to Aabar Investments PJS Ltd on pretence of buying back 49% of shares in 1MDB subsidiary companies.

       The lawyer said the diabolical scheme was undertaken by 1MDB’s conniving management with the help of “an outsider”, referring to Low who was said to have never held a formal position in 1MDB.

       Muhammad Shafee: The board never knew.

       Ismee: Correct.

       Najib, 69, is on trial for 25 charges in total – four for abuse of power that allegedly brought him financial benefit to the tune of RM2.28bil; and 21 for money laundering involving the same amount of money.

       The hearing continues before Justice Collin Lawrence Sequerah on April 6.