KUALA LUMPUR, June 15 — The High Court today heard about a unique clause in the 1Malaysia Development Berhad (1MDB) company constitution requiring the prime minister’s written approval for important financial decisions.

Referring to Article 117, which was added into 1MDB’s memorandum and articles of association (M&A), otherwise known as its company constitution, Datuk Siti Zauyah Mohd Desa said the clause does not appear in any other company owned by the Finance Ministry’s Minister of Finance Incorporated (MoF Inc).

Formerly the Finance Ministry deputy secretary-general (policy), she is the prosecution’s 26th witness in former prime minister Datuk Seri Najib Razak’s trial over the misappropriation of more than RM2 billion of 1MDB funds.

“I wish to state here, as far as I know, the articles contained in 1MDB’s M&A document such as Article 68, 93 and 117 have never been contained in any M&A of other MoF Inc companies. These articles are only applied on 1MDB,” the retired senior civil servant testified.

Siti Zauyah also said the preparation of company constitutions for MoF Inc-owned companies have to be referred to the Finance Ministry first as required under the law, but said the amendments to 1MDB’s company constitution — including the insertion of Article 117 — was not referred to the MoF Inc division in the Finance Ministry first.

She confirmed that no referral was made to her division when the M&A was prepared for 1MDB during the process of discussions and transferring of Terengganu Investment Authority (TIA) Berhad shares to MoF Inc.

“I also do not know how clause 117 in this M&A was inserted as the preparation of M&A was done earlier by 1MDB’s company secretary before it was transferred to MoF Inc. When it became a company under MoF Inc’s ownership, I confirm that this 1MDB M&A was used by the company and I am not certain if the M&A had been amended or not as the responsibility of this matter is under 1MDB’s management headed by Shahrol Azral as CEO,” she said.

Under Article 117, the prime minister’s prior written approval is required for any amendments to 1MDB’s company constitution before such amendments can take effect.

The prime minister’s written approval is likewise required before any appointment and removal of 1MDB directors and senior management can happen.

Under the same Article 117, the prime minister’s written approval is also required for “any financial commitment (including investment), restructuring, or any other matter which is likely to affect the guarantee given by the Federal Government of Malaysia for the benefit of the company, the national interest, national security or any policy of the Federal Government of Malaysia”.

Adding to that, what amounts to national interest, national security or policy of the federal government to be decided by the Malaysian government and with such determination to be final and conclusive.

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