The Malaysian Insight

NAJIB Razak approved RM4 billion in loans to SRC International Sdn Bhd, and yet, never met the board of directors from when the company was formed in 2011 till he stepped down as prime minister in 2018, the Kuala Lumpur High Court heard today.

During cross-examination by ad hoc prosecutor V. Sithambaram on the fate of the loans he approved, Najib said he trusted the SRC International board to do its job.

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

SRC International was formed in January 2011, and Najib stepped down as prime minister on May 10, 2018, two days after Barisan Nasional lost the general election.

The board comprised former SRC International chairman Ismee Ismail; former CEO Nik Faisal Ariff Kamil, who is now on the run; former director Suboh Md Yassin; Che Abdullah @ Rashidi Che Omar; and, former 1Malaysia Development Bhd CEO Shahrol Azral Ibrahim Halmi. All five were appointed by Najib on August 1, 2011.

The 66-year-old accused told the court that it was Minister of Finance Inc’s (MoF Inc) prerogative to inform him about SRC International’s activities.

Asked by Sithambaram if he had ever requested to meet the SRC International board despite it never passing any shareholders’ resolutions, Najib said he never did so because he trusted the board.

“There’s MKD (MoF Inc); the onus is on them to report if there was any problem. They were monitoring SRC International’s operations,” he said to the prosecutor’s question on how he could have trusted the board when it had not done anything in seven years.

Najib was also questioned on why he approved a second loan of RM2 billion in January 2012, when he was not given an update on the first RM2 billion investment in the energy sector.

He was asked whether he knew that RM1.8 billion from the first loan was kept overseas, with most of the funds stashed in Swiss bank BSI.

Najib: I thought they had invested away. I had that impression.

Sithambaram: Sir, never mind about impressions. We are dealing with facts. We now know it was in Switzerland. Didn’t that ring an alarm bell?

Najib: I can’t remember.

Sithambaram: In fact, almost the entirety of SRC International’s loan was wiped out. Did you know?

Najib: Only later.

Sithambaram: Do you have an answer?

Najib: I have none.

Sithambaram: Apart from sending RM1.8 billion to Switzerland, nothing was achieved. And before even considering the second government guarantee as finance minister, was any due diligence undertaken?

Najib said the loan was given based on the management’s track record, to which Sithambaram suggested that there is no such record to speak of.

Sithambaram: I am putting it to you, sir, that after the first (government guarantee), you should not have agreed to the second government guarantee.

Najib: I disagree.

Sithambaram: And the granting of the second RM2 billion loan by KWAP (Retirement Fund Inc) looks more like a scam than a real investment.

Najib: I disagree.

Sithambaram: Do you agree, if you look at it today, that the only achievement was parking RM3.6 billion in Switzerland?

Najib said the money was “in transit”, as he was told by Nik Faisal.

Sithambaram: It could not be in transit for seven years, sir. The transit is too long.

Najib: That’s their responsibility.

Sithambaram: Are you saying you are not responsible?

Najib: No, I am not.

Najib denied suggestions that he had a personal interest in SRC International.

The former prime minister is represented by a dozen lawyers led by Muhammad Shafee Abdullah.

The trial, before judge Mohd Nazlan Mohd Ghazali, resumes tomorrow morning. – January 21, 2020.