The 46th prosecution witness told the Kuala Lumpur High Court that she as BNM governor had written to then finance minister Najib between 2014 and 2015 to raise her concerns over the Malaysian sovereign wealth fund’s increasingly high debt levels and repayment challenges that led to restructuring of a loan from domestic banks.

“It must be pointed out that when the above-mentioned letters were issued by BNM to Najib, in his capacity as prime minister and finance minister, BNM had no knowledge of the fact that the funds meant for investment by 1MDB had been remitted into accounts that were unrelated to 1MDB’s investment declaration.

“In fact, at that material time, BNM did not have knowledge that the funds in Najib’s accounts were from 1MDB,” Zeti, 74, testified during the RM2.28 billion 1MDB corruption trial against Najib.

She said that BNM found out that US$700 million out of US$1 billion in funds – meant for a joint venture between 1MDB and Petrosaudi International Limited – had been diverted instead into the account of Seychelles-incorporated Good Star Limited, an entity that belonged to fugitive businessperson Low Taek Jho (Jho Low).

She said that BNM received the tip-off from foreign authorities that also monitored international monetary financial flows into and out of Malaysia.

Zeti reiterated her previous denial against Najib’s claims – made during an interview with Malaysiakini in 2018 – that she knew about the inflow of RM2.6 billion into his accounts at AmBank and that she did not raise any questions about it.

She repeated her 2018 denial that it was Najib who asked her to announce to the public that he did nothing wrong in terms of the financial transactions.

“All account holders in our financial system are protected by the banking secrecy provisions in our legislation. No one can have access to any account unless the financial institution concerned detects suspicious activities in the account and reports it to the central bank,” she said.

During examination-in-chief by deputy public prosecutor Ahmad Akram Gharib, Zeti said that Najib never replied to BNM’s letters over the worrying financial state of 1MDB.

No knowledge of account opened for Arab donation

During proceedings before trial judge Collin Lawrence Sequerah, Zeti denied she was ever informed that the intent of then prime minister Najib to open a bank account in early 2011 was to receive a US$100 million Arab donation.

Her testimony contradicted previous testimony by the 39th prosecution witness, the then AmBank managing director Cheah Teck Kuang.

Cheah had testified that he met Zeti during a courtesy visit on Jan 28, 2011, and told her about Najib’s purpose in opening the 694 account.

Reading from her 17-page written witness statement, Zeti today said that during the meeting, she asked Cheah in the future to refer all such matters to the then Bank Negara deputy governor.

The deputy governor is tasked with overseeing financial surveillance and supervision of Malaysia’s financial system.

“Nothing further was discussed and the meeting was short.

“At no time during this meeting did Cheah Teck Kuang ever mention any intended donations that were to be remitted into this account,” Zeti said.

The 694 account, coded AmPrivate Banking-MR, was later linked to an alleged donation from the Saudi royal family amounting to US$681 million into the account in 2013.

Zeti also denied Cheah’s testimony that he gave her two out of four alleged Arab letters that confirm billions of US dollars worth of donations to Najib.

The defence team had relied on these letters to show Najib’s alleged belief back then that Arab donations would come into his accounts.

Former finance minister Najib is facing four counts of abuse of power and 21 counts of money laundering involving RM2.28 billion from 1MDB, a Malaysian sovereign wealth fund fully owned by the Minister of Finance Incorporated (MOF Inc).

For the four abuse of power charges, the former Pekan MP is alleged to have committed the offences at AmIslamic Bank Bhd’s Jalan Raja Chulan branch in Bukit Ceylon, Kuala Lumpur, between Feb 24, 2011, and Dec 19, 2014.

On the 21 money laundering counts, the accused is purported to have committed the offences at the same bank between March 22, 2013, and Aug 30, 2013.

Trial before Sequerah will resume on Aug 14. MKINI