KUALA LUMPUR: It took seven years for Bank Negara Malaysia to discover that millions belonging to 1Malaysia Development Bhd (1MBD) were being siphoned into a foreign entity owned by fugitive businessman Low Taek Jho or Jho Low.
Former governor Tan Sri Zeti Akhtar Aziz said this when she testified as the star witness in Datuk Seri Najib Razak's corruption trial for misappropriating funds belonging to the sovereign wealth fund.
However, the 75-year-old banker said this was normal as financial authorities take many years to uncover and investigate such wrongdoings.
She said this when answering questions from Najib's lawyer Tan Sri Muhammad Shafee Abdullah regarding BNM's discovery of US$700 million from 1MDB was remitted into Good Star Ltd – a company owned by Low.
The money was part of 1MDB's US$1 billion remittance intended for the acquisition of 40 per cent shares in the 1MDB-PetroSaudi Joint Venture (JVco) in 2009.
It was reported that only US$300 million was remitted to the joint venture firm's JP Morgan account.
"It (the discovery) was a cumulative effort with regulators from all over the world as well as our internal investigation through the Internal Transactions Information System (ITIS) and Swift code.
"We initiated the investigation against 1MDB after it failed to furnish information to explain the transaction.
"We conducted our own follow-up on the remittance to find out the status of the investment, but no information was given by the 1MDB," she said.
Zeti, in her witness statement, testified that a special task force (STF) consisting of then Attorney-General Tan Sri Abdul Gani Patail, then Malaysian Anti-Corruption Commission (MACC) chief commissioner Tan Sri Abu Kassim Mohamed as well as representatives from the police and Bank Negara was formed to initiate probe against 1MDB in 2015.
In response to Shafee's question about whether Najib was involved in instructing the remittance of US$700 million into Good Star's account, Zeti said 'it does not appear in writing'.
Meanwhile, Zeti said the central bank also rejected 1MDB's application to borrow RM4.9 billion from offshore sources in 2014.
"1MDB tried to take on foreign debt again on June 3, 2014, but was rejected by BNM.
"We (BNM) rejected this application and therefore it put a stop to their grand scheme," she said, adding that 1MDB filed their appeal but was rejected by the central bank.
Zeti also confirmed that Najib, who was then the prime minister and finance minister never contacted BNM to review its decision over this matter.
Najib, 70, is facing 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.