The Malaysian Insight

FORMER prime minister Najib Razak will continue being cross-examined by Attorney-General Tommy Thomas today, the fourth day of the defence stage in the SRC International trial.

Thomas will cover areas involving commercial law and governance after which ad hoc prosecutor V. Sithambaram, a seasoned criminal lawyer, will take over.

Najib, who is the first defence witness, had finished reading out his 243-page witness statement on Monday, where he addressed allegations that he misappropriated RM42 million of public funds.

Yesterday, he disputed suggestions by Thomas that he had the power to influence the board and management of Retirement Fund Inc (KWAP) and SRC International Sdn Bhd.

Najib was questioned over his influence over KWAP’s first loan of RM2 billion to SRC International.

The prosecution also suggested that he controlled SRC International’s board as he had the power to hire and fire.

Najib said he was acting within his powers when he removed former deputy prime minister Muhyiddin Yassin and former minister of rural development Mohd Shafie Apdal from his cabinet in 2015.

Najib said he did not remove them for disagreeing with him during cabinet meetings but for making unsanctioned statements.

The duo had said they were dropped because they were critical of Najib’s handling of the 1Malaysia Development Berhad scandal.

Muhyiddin is now president of Bersatu, a component party of the Pakatan Harapan (PH) coalition, while Shafie leads Sabah-based Warisan, a PH ally.

Najib’s charges in the SRC International trial are linked to RM4 billion in loans issued to the entity in 2011 and 2012, for which he is accused of receiving RM42 million in 2014 and 2015.

Hearing of the defence stage is scheduled until December 19, before Kuala Lumpur High Court judge Mohd Nazlan Mohd Ghazali.

The Malaysian Insight brings you today’s proceedings live:

4.56pm: Nazlan allows the prosecution’s request that the hearing be adjourned to next Wednesday at 9am.

4.55pm: After a meeting in chambers with Nazlan, Sithambaram tells the court that he needs more time to go through Najib’s 243-page witness statement to prepare for cross-examination.

Shafee says Najib’s statement is the exception, as it “cuts A through Z”.

4.45pm: Nazlan tells Shafee that he hopes there will be no repeat of this episode. Shafee apologises to the judge.

4.41pm: Shafee, after making a call to Najib, tells the judge that his client is stuck in traffic in Jalan Tun Razak.

4.38pm: Court is back in session. However, Najib is nowhere to be seen.

4.13pm: Thomas finishes his cross-examination. Court takes a break.

4.11pm: Najib says he asked SRC International to bring the money back to Malaysia.

Thomas asks if Najib was not shocked about what happened to the money.

Thomas: Weren’t you personally shocked as to what happened to the funds?

Najib: We appointed SRC International (for that).

Thomas: SRC International is not on trial. You are!

Najib says he did not summon the five directors because he had asked SRC International to do it.

4.04pm: Najib says he realised SRC International was having cash-flow issues when the entity sought another loan, for RM300 million, from the Finance Ministry to service its debt to KWAP.

He adds that he did not take action with regard to the frozen funds in Switzerland because the SRC International management should be the one to do so.

3.59pm: Thomas tells the court that on November 4, 2015, there was a memo from the cabinet on the government’s nod for a short-term RM100 million loan because of the freeze on SRC International’s money in Switzerland.

He says SRC International had cash-flow problems within 3½ years of the RM4 billion loans being granted.

Thomas: In 3½ years, the RM4 billion (must have) vanished for SRC International, for them to have cash-flow issues.

Najib: I don’t know how much was frozen in Switzerland, but if the funds were frozen by the Swiss government, it means there’s money in the account.

3.45pm: Thomas suggests that Putrajaya gave two government guarantees for loans totalling RM4 billion because it was pushed by Najib.

Najib: When SRC International was first formed with the support of the Economic Planning Unit, it must have enough funds. So, that was why the government agreed and approved the government guarantees.

Thomas: Even today, your answer is a cover.

Najib: I disagree.

Najib says he denied then second finance minister Ahmad Husni Hanadzlah’s request to go to Switzerland because it was not a formal request.

Husni wanted to go to Switzerland because SRC International’s funds had been frozen by the Swiss government.

3.08pm: Thomas tells Najib that the second loan was disbursed in a single payment on March 23, 2012. He asks when the former prime minister was informed about it.

Najib says he cannot remember, but added that everything was done according to process.

Thomas asks again if Najib was personally informed about the disbursement.

Thomas: When were you personally informed?

Najib: I don’t remember.

2.55pm: Thomas says for the first loan, KWAP held a special meeting, but only a general meeting was called for the second loan, which was “pre-approved”. He asks whether Najib was the “decision-maker” for the second loan.

Thomas: As far as KWAP is concerned, the real decision-maker for this loan was you?

Najib: I disagree.

2.47pm: Thomas asks Najib if the decision to take the second KWAP loan was his, and whether the SRC International board of directors endorsed it. Najib disagrees.

2.39pm: Court resumes after lunch.

12.55pm: Court adjourns for lunch.

12.43pm: Thomas: You never ever signed a minute like this (referring to the minutes of the shareholders’ meeting)?

Najib: Never.

12.38pm: As Najib disputes the signatures on the minutes of shareholders’ meeting, Thomas asks if he had ever signed any of these documents.

Thomas: To the best of your memories, you never signed any of these (minutes of shareholders’ meeting)?

Najib: Never.

Najib says his signature could be forged.

Najib: If it’s forged, then it will look like mine.

12.13pm: Thomas asks Najib if he asked SRC International’s board what happened to the first KWAP loan, when a second government guarantee was requested?

Najib: Yes, I asked.

Thomas: Did you ask where the money was?

Najib: I didn’t ask where the money was but they said there were some investment plans for this (new loan).

Thomas: Although you didn’t know, you were prepared to support?

Najib: Yes.

Najib says SRC International wanted the second loan because the first one was insufficient for investments.

12.06pm: Thomas asks if Najib was at all aware that some time in September or October 2011, monies were moved to Hong Kong.

Najib says no.

The defence objects to the line of question.

Thomas: Are you saying that shortly after the government guarantee was given, you were no longer interested in matters related to SRC International?

Najib: These are operational matters.

11.34am: Government guarantee by cabinet for the loan was given on August 17, 2011 and the loan was disbursed on August 29, 2011.

Thomas says it was just 12 days after the cabinet approved the government guarantee.

He asks Najib if the speed of disbursement was because of his personal involvement in the matter.

Najib disagrees.

11.30am: Thomas ask Najib about the first RM2 billion KWAP loan to SRC International.

Thomas tells the court that witness Wedani Senan, then AmBank remittance department manager testified that the RM2 billion was credited to SRC International’s AmBank account in four tranches (RM500 mil each transaction).

He asks Najib’s knowledge in this.

Najib says it is related to operations and he doesn’t know about it.

“This is operational. I don’t know about operational. I only know about government guarantee,” says Najib.

11.24am: Court resumes.

10.52am: Court is in recess.

10.22am: Thomas says the above documents and proposals to KWAP were made before the SRC International board of directors was appointed.

Referring to the answers given by Najib yesterday, Tommy says Najib mentioned about making steps based on advice from SRC International’s board of directors.

Thomas asks Najib how he made decisions for these seven documents when the board of directors is non-existent at the time.

Najib: It must have been forwarded by Datuk Sharol (then 1MDB CEO Shahrol Azral Ibrahim Halmi)

Thomas: I put it to you that all these decisions were made without any board of directors and solely by you.

Najib: No. I disagree.

10.20am: Thomas shows Najib seven SRC exhibits:  

- proposal to incorporate SRC International (August 24, 2010), 

- memorandum and articles for SRC International (January 4, 2011), 

- SRC International CEO Nik Faisal Ariff Kamil requesting a RM3.95 billion loan, addressed to Najib (June 3, 2011),

- email from former KWAP assistant vice-president Amirul Imran Ahmad to Nik Faisal (June 29, 2011),

- Nik Faisal’s email exchanges (July 1, 2011),

- proposal paper for RM1 billion (July 2, 2011),

- proposal paper for RM2 billion (July 11, 2011).

9.53am: Thomas is going through the basics of how a loan is given by banks, why it needs a guarantor and what action banks can take if borrowers fail to pay.

9.25am: Najib takes the stand. Thomas continues his cross-examination. – December 11, 2019.