In Najib’s 1MDB trial, firm’s ex-CEO says didn’t dare speak truth in 2013 on overpriced deals to protect career, claims Jho Low ran show

KUALA LUMPUR, Feb 8 — Mohd Hazem Abd Rahman told the High Court today that he did not dare speak his mind about 1Malaysia Development Berhad’s (1MDB) overpriced deals to buy power plants when he was its CEO in 2013 as he feared his career would be jeopardised.

Hazem was testifying as the 10th prosecution witness in former prime minister Datuk Seri Najib Razak’s ongoing trial for alleged power abuse and money laundering of over RM2 billion of 1MDB funds.

He also told the court that when he was 1MDB CEO, he took instructions from Low Taek Jho — better known as Jho Low — whom he previously described as Najib‘s trusted right-hand man and proxy and special adviser for 1MDB and was the main person running the sovereign investment company.

In the witness stand today, Hazem was asked about a September 4, 2013 email sent by Low to him and in which Hazem and other senior 1MDB officials were asked to contribute and propose answers for the government to answer the public and the federal Opposition regarding 1MDB issues.

Hazem previously said the email thread had originated from one Romen Bose who was contacted by Najib to help with 1MDB responses to the international media.

Bose had sent a list of questions to Najib’s special officer Datuk Wan Ahmad Shihab Wan Ismail who forwarded the email to 1MDB’s general counsel Jasmine Loo who forwarded it to Low.

Low had then sent the email to Hazem, Loo, 1MDB chief financial officer Azmi Tahir, deputy chief financial officer Terence Geh to provide comments on 1MDB’s power plant deals with Tanjong Energy Sdn Bhd dan Genting Sanyen Power Sdn Bhd, before the comments were forwarded back to Bose.

Najib’s lawyer Wan Aizuddin Wan Mohammed pointed to a remark Hazem made in his witness statement: “I did not dare to present the truth from my point of view at that time as I was bound with 1MDB and I feared that my career would be affected if I did not support Datuk Seri Najib who was the prime minister at that time.”

Wan Aizuddin noted that the email was an internally-circulated email among company officials, and suggested that Hazem’s position and career as 1MDB CEO would not have been affected or jeopardised even if he were to have raised his concerns, frustrations or if he had proposed answers that are not favourable to 1MDB.

“I think what I’m trying to highlight here is the reality of what I think about the acquisition. What we were supposed to draft is excuses to the public, which may not be what I think. You have to follow along, yeah,” Hazem replied.

Hazem said he had at other times raised his concerns and frustrations regarding 1MDB matters directly to Low and also to Najib’s former principal private secretary Datuk Azlin Alias, but did not reply to this email.

Explaining why he did not dare to speak the truth and just “followed along” as required, Hazem said that the 1MDB management officials were being asked to put up responses that could be acceptable to the public instead of stating the reality regarding accusations by the opposition on 1MDB matters.

He noted that failure to do so could put his career at risk: “I will be regarded as not playing along with 1MDB and that could jeopardise my career”.

Asked by Wan Aizuddin on who he meant by “1MDB”, Hazem said it included individuals like Low, and reiterated that this was what stopped him from giving truthful responses in 2013.

Among other things, Hazem had said he had actually felt that 1MDB had bought the power plants in overpriced deals as the companies’ power plants were nearing the end of their concession terms at that time.

He added that he agreed with the public’s view that Goldman Sachs received a high fee for helping to raise funds via a bond as the fee could have been lower if the bonds issuance was not done hastily and if it was done competitively in the open market instead of under the radar between only 1MDB and Goldman Sachs.

Wan Aizuddin then suggested that Hazem had no reason not to voice his concern and actual thoughts over 1MDB matters to Low.

But the witness appeared to disagree, saying: “I think if I were to do that, I would not be the CEO after that.”

Wan Aizuddin: That’s your assumption.

Hazem: No, that was not my assumption.

Wan Aizuddin: Why do you think so?

Hazem: Because Jho Low basically runs the company.

Wan Aizuddin: So you don’t want to offend Jho Low?

Hazem: Not that I don’t want to offend Jho Low. If I were to say something that is opposite of the instruction, that could obviously jeopardise my career.

At the time of this email, Hazem was about six months into his job as CEO of 1MDB. He had joined the company as chief operating officer in August 2012 and was its CEO from March 2013 to early January 2015.

Hazem confirmed he had privately raised his frustrations in Blackberry messages including in 2012 and 2013 over a proposed pricey deal to acquire YTL’s power assets that he felt would put 1MDB in a bad light again, agreeing that he was still promoted to CEO after having voiced such concerns directly to Low.

When Wan Aizuddin suggested that there was no danger to his career if he aired his frustrations, Hazem stressed that he would still need to follow “instructions” from Low.

He confirmed that Low did not threaten to have him sacked from 1MDB after he voiced his views on the proposed YTL acquisition.

It prompted Wan Aizuddin to ask: “Did he at any point say, with this kind of attitude, you will never get anywhere in 1MDB?”

Hazem replied: “I think it’s on the basis, either you follow, or if you don’t want to follow, you quit. That was how 1MDB was run.”

Hazem said the “culture” in 1MDB was to either follow instructions or to “make your own way out”, noting that he had himself resigned from the company.

Responding to Wan Aizuddin’s questions, Hazem said it was not mere popular opinion that 1MDB officials including himself were expected to follow, but “instructions from Jho Low”.

“You have to follow these instructions which in reality you may not like it, you may have frustrations, but if you don’t want to follow, you may as well quit,” Hazem said, later adding: “When you are CEO of that organisation and you are asked to do this, either you follow it or if you don’t follow it, you should take your own way out.”

Wan Aizuddin: Being the CEO, you are supposed to be the head honcho, giving instructions, not receiving them.

Hazem: Unfortunately, that’s not how it’s run in 1MDB.

Hazem had previously also said he viewed Najib as the “ultimate boss” and the person who ultimately ran the show for 1MDB.

Wan Aizuddin also asked Hazem about a lengthy email that he had received from Low on September 18, 2013 on the latter’s plans for 1MDB’s investment and financing.

In that email, Low had referred to Hazem as “boss”.

Wan Aizuddin then asked if it was normal for Low to call him as “boss”, with Hazem then replying: “Sometimes it’s like you go to the mamak restaurant and say ‘boss’.”

Hazem said he did not know if Low also referred to others as “boss”, but agreed that Low was the type of person that would randomly call anyone “boss”.

The trial before High Court judge Collin Lawrence Sequerah resumes at 1.30pm tomorrow.

Najib’s 1MDB trial was initially set to run for four full days this week, but Najib’s lead defence lawyer Tan Sri Muhammad Shafee Abdullah had this morning requested that the trial only run in the afternoon for today and tomorrow.

Shafee had said this was due to the need for him and Najib to split their time between this 1MDB trial and a two-day court hearing today and tomorrow being held concurrently over the government’s bid to forfeit millions of ringgit and luxury goods including jewellery seized from a Pavillion apartment owned by Obyu Holdings Sdn Bhd as part of a 1MDB-linked raid in 2018, with Shafee saying that Umno, Najib, Obyu were involved in the forfeiture case with Najib’s presence said to be required.

The judge in Najib’s 1MDB trial was however quick to say that it must go on without any delay, with the only allowance being the sharing of time for the forfeiture case’s two-day hearing.

“I have to carry on. You have to carry on there and divide the time, I’m not going to postpone the case…This case can go on, we have to divide the time. I can allow you to be there, but part of the trial has to go on as well.”

Following that, it was decided that the 1MDB trial for Najib would start at 1.30pm for today and tomorrow, instead of from the morning.