KUALA LUMPUR – The high court here was today told that SRC International Sdn Bhd failed to perform due diligence on RM1.8 billion, the first Retirement Fund Inc (KWAP) loan, before transferring it offshore for purported investment activities.
SRC International’s former director Datuk Shahrol Azral Ibrahim Halmi, 54, said no due diligence was carried out as the directors’ circular resolution was signed and approved by Datuk Seri Najib Razak, who was prime minister and finance minister at the material time.
Shahrol said this when testifying as a third party in SRC International’s US$1.18-billion (RM5.66-billion) civil suit against Najib and its former chief executive Nik Faisal Ariff Kamil.
“I felt I was under obligation from the instructions of the PM. I would have preferred for information to be available but I went ahead and signed it. It wasn’t only instructions, this was signed by the PM and former finance minister and shareholder of 1MDB, so that carried a lot of weight.
“We tried to find as much information as we could but when it came to execution the PM signed off… so we had to do it. The PM thinks it’s a good idea, I trust his judgments,” said the witness when queried by Najib’s counsel Harvinderjit Singh.
The loan money was transferred to Falcon Private Bank Ltd in Switzerland and Julius Baer in Hong Kong, to be used to acquire two companies in Indonesia (PT ABM Investama and Bumi Resources Tbk PT) and two companies in Mongolia (Gobi Coal and Energy Ltd and Erdenes-Tavan Tolgoi).
In the SRC criminal trial in 2019, former SRC chairman Tan Sri Ismee Ismail testified that Nik Faisal was ordered by Najib to transfer out the money in a meeting on September 7, 2011.
SRC, under its new management, filed the suit in May 2021, claiming that Najib had committed breach of trust and power abuse, personally benefited from the company’s funds and misappropriated the said funds.
It is also seeking a court declaration that Najib is responsible for the company’s losses due to his breach of duties and trust and for the former prime minister to pay back the RM42 million in losses that it has suffered.
Najib, 70, has been serving jail time at Kajang Prison since August 23, 2022, after being convicted of misappropriating RM42 million in SRC International funds.
He then filed a petition for a royal pardon on September 2, 2022, and the Pardons Board in January this year reduced Najib’s jail term from 12 years to six, with the fine cut to RM50 million from RM210 million.
The trial before judge Datuk Ahmad Fairuz Zainol Abidin continues on May 6 at 9.30am. – April 17, 2024