Months into CEO job, Hazem says wanted to quit ‘biggest trap’ 1MDB

KUALA LUMPUR, Sept 14 — A former CEO of 1Malaysia Development Berhad (1MDB) wanted to resign from the company just months into the job due to concerns over the company’s affairs, and even considered the government-owned company to have fallen into the “biggest trap ever”, the court heard today.

Mohd Hazem Abd Rahman, who was appointed as 1MDB CEO in March 2013, said these were his thoughts in September 2013 which he had shared with fellow 1MDB senior official Azmi Tahir in an email.

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

After stepping into the 1MDB position, Mohd Hazem said he had felt concerned about the unclear status of 1MDB’s investment, as well as 1MDB’s problematic financial status, as it had taken on too much debt which he believed could not be repaid.

Mohd Hazem said he had also worried over the status of 1MDB’s funds purportedly located overseas but which the company was unable to bring back to repay its debts, fearing that the funds may have been misused.

After Mohd Hazem expressed his disappointment to Najib’s alleged right-hand man for 1MDB affairs — Low Taek Jho — over the way 1MDB was being managed, Low had written a lengthy email on September 18, 2013 on 1MDB’s investment and financing plans with separate portfolios to be carried out by Mohd Hazem and other 1MDB officials.

After receiving Low’s email, Mohd Hazem said he had forwarded it the next day to 1MDB chief financial officer Azmi Tahir, privately telling the latter of his worries over the number of projects and funds involved under 1MDB.

“I also told Azmi Tahir about my plan to resign in light of my worries,” he told the court today.

Mohd Hazem then read out in court today his September 19, 2013 email to Azmi, where he confided that he felt “overwhelmed” by Low’s email.

“I feel obligated to tell you that this email would further confirm my decision that I should leave the company,” Mohd Hazem had told Azmi in the email, further stating in the email that he did not believe the matters listed by Low were “realistic” goals for anyone to achieve in the face of the significant outcry that 1MDB was facing from the public then.

Mohd Hazem also told Azmi in the email that he felt that most of the figures provided by Low were more like “back of the envelope” calculations without consideration for factors such as operations, stakeholders, the public and implications.

“Everything here is done in haste which is the primary reason why we fell into what I think is the biggest trap in Malaysia’s corporate history,” he had said in the email to Azmi, but did not elaborate on this point.

In the same email, Mohd Hazem had also said he would highlight to Low his intention to leave the company so that the matter could be handled without attracting “unnecessary media attention”.

Although Low had asked for his written instructions over 1MDB to be deleted, Mohd Hazem today told deputy public prosecutor Mohamad Mustaffa P. Kunyalam that he did not follow through with the request as he wanted to keep records as “evidence of instructions given”.

Throughout his testimony in court today, Mohd Hazem shared his multiple misgivings and doubts over how 1MDB affairs were carried out, as well as his resistance to some of Low’s instructions over the company’s matters.

But Mohd Hazem said he ultimately had to carry out the instructions given by Low whom he described as Najib’s “proxy” in 1MDB matters, as he did not want to be seen as opposing Najib’s orders as the prime minister because his career prospects in both the public and corporate sectors could be affected.

Prior to being appointed as 1MDB chief operating officer in August 2012 and as 1MDB CEO in March 2013, Mohd Hazem had worked in the banking and corporate sector since 1996 with various stints including in AmBank, as an investment analyst, and positions within government-linked company, Sime Darby.

Najib’s trial before High Court judge Collin Lawrence Sequerah resumes tomorrow.