Home English News PetroSaudi CEO received US$85 million from 1MDB joint veture deal

PetroSaudi CEO received US$85 million from 1MDB joint veture deal


KUALA LUMPUR: PetroSaudi International Ltd (PSI) chief executive officer (CEO), Tarek Obaid had received US$85 million in commission as a result of the company’s joint venture (JV) deal with 1Malaysia Development Bhd (1MDB), the High Court was told today.

Former 1Malaysia Development Berhad (1MDB) CEO, Datuk Shahrol Azral Ibrahim Halmi, 49, said the company, Good Star Ltd, allegedly owned by fugitive businessman Low Taek Jho or Jho Low, had paid US$85 million to Tarek, who was also PSI co-founder.

The ninth prosecution witness said this when he was shown a JP Morgan bank statement by Tan Sri Muhammad Shafee Abdullah the defence counsel of Datuk Seri Najib Tun Razak during cross-examination on the 28th day of the former prime minister’s 1MDB trial.


Muhammad Shafee: Based on the bank statement, Tarek was paid US$85 million out of the US$700 million from Good Star for commission as part of the JV deal between 1MDB and PSI.

Shahrol Azral: Yes. The joint-venture is the 1MDB-Petrosaudi deal.

Muhammad Shafee: So, US$700 million went there, US$85 million to Tarek to swipe as commission or purported commission, Shahrol Azral replied, “Yes”.

Muhammad Shafee: Can this be a bona fide commission or is this outright stealing?

Shahrol Azral: There’s not enough information to determine that.

Muhammad Shafee: You are the engineer. How much is the percentage?

Shahrol Azral: Slightly over 10 per cent.

Muhammad Shafee: That’s a lot for a commission for a JV and the witness replied, “Yes”.

Shahrol Azral also agreed with Muhammad Shafee that he was not informed by Tarek at that time about the payment, which may have been a conflict of interest on Tarek’s behalf.

Asked whether Tarek had declared the money was from that deal, Shahrol Azral said, “No, he didn’t”.

Earlier, Shahrol Azral agreed with Muhammad Shafee that Tarek had paid a portion of the US$85 million which he received from Good Star to PetroSaudi director Patrick Mahoney.

Muhammad Shafee said based on banking documents, Tarek had transferred US$33 million to a bank account belonging to Patrick Mahoney on Oct 20, 2009.

The lawyer said this was about two weeks after Tarek received the US$85 million from Good Star, which had earlier received US$700 million from 1MDB.

Muhammad Shafee: So Tarek received US$85 million, then he paid Patrick Mahoney US$33 million, Shahrol Azral replied, “Yes”.

However, the witness said that he did not know anything about the payment that Tarek and Patrick Mahoney received.

Shahrol Azral also said that it was possible Tarek paid about £127,000 in legal services to White & Case, the London law firm which represented the 1MDB-PetroSaudi JV company and the payment should have come from the company, either PSI or PetroSaudi Cayman.

The witness said this after Muhammad Shafee raised a legal service payment to the law firm.

Muhammad Shafee: But the fact that it came from Tarek, does that tell you something? Shahrol Azral replied, “Without more info, I can’t ascertain”.

Najib, 66, faces four charges of using his position to obtain bribes totalling RM2.3 billion from 1MDB funds and 21 charges of money laundering involving the same amount.

The hearing before Judge Collin Lawrence Sequerah continues tomorrow.