Malaysiakini NEWS

Day 21: 'SRC board went to Switzerland to check if money still in the bank'

Hidir Reduan Abdul Rashid & Hariz Mohd  |  Published:  |  Modified:

LIVE | The criminal trial of former prime minister Najib Abdul Razak involving the alleged misappropriation of funds from SRC International Sdn Bhd enters its 21st today at the High Court in Kuala Lumpur.

Malaysiakini brings you live reports of the proceedings.

Summary of Najib’s SRC RM42 million case

Najib is facing 7 charges relating to RM42m involving SRC International, a former 1MDB subsidiary.

  • 1 abuse of power charge
  • 3 criminal breach of trust (CBT) charges
  • 3 money laundering charges
  • ClickTap to view infomation on judge, prosecution and defence team


KEY HIGHLIGHTS

  • 'SRC board went to Switzerland to check if money still in the bank'
  • Minutes of Najib-Nik Faisal meeting not admitted as evidence 
  • Defence cries minutes of Najib-Nik Faisal meeting 'fake' 
  • 'First SRC directors' meeting discussed securing KWAP loan'
  • Ex-director says he quit SRC over how Nik Faisal managed accounts
  • 'Ultimate boss' Najib had influence over KWAP granting loan - witness
  • 'I articulated the words myself', ex-KWAP CEO says on witness statement
  • Ex-KWAP CEO cannot recall what transpired in meeting with Najib
  • 'MOF advice for additional KWAP loan not an order'
  • Ex-PM enters the dock


Thank you for following Malaysiakini's live report

5.07pm - Thank you for following our live report today.

Reporting by Hariz Mohd and Hidir Reduan. Photographs by Azneal Ishak. Social media updates by Ewe Ling Yenn.

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5.05pm - Proceedings have been adjourned and will resume tomorrow at 9am with the examination-in-chief of former SRC International director Ismee Ismail.


'SRC board went to Switzerland to check if money still in the bank'

4.35pm - Former director Ismee Ismail testifies that the entire SRC International board visited BSI Switzerland (now EFG) headquarters in Lugano in September 2013 to make sure its funds were still with the bank.

Ismee tells DPP Ishak Mohd Yusoff that the board – himself, Suboh Yassin, Che Abdullah @ Rashidi Che Omar, Shahrol Azral Ibrahim Halmi, and Nik Faisal Ariff Kamil – wanted to talk to the top management of BSI.

Ishak: In September 2013 (referring to SRC International minutes for that year), you went to Switzerland?

Ismee: Yes, the whole board of directors (of SRC International) went, including Rashidi, Suboh and Nik Faisal.

Ishak: This was initiated by the shareholder?

Ismee: I think it was initiated by management. If there was shareholder agreement I do not know. The issue of the funds in BSI kept arising, so we went there and met the senior management of the bank in Lugano. Before this the management only had stories about BSI, so we went there, and were assured that our money was safe and secure at BSI. BSI is a big bank in Lugano, I was comforted.

Ishak: Why was it important to confirm that the money was in BSI?

Ismee: To ensure the money is still there, it was very important for us to confirm that. To be assured that our funds were still there, deposited in the bank.

Ishak: How did you know the money was actually there?

Ismee: They (BSI management) did not actually show us the money. We had a meeting with their senior officers, I think their president. I cannot remember their exact names, they gave us an explanation on the operation of the bank, they gave us assurance that the money is still there.

Earlier today, Ismee said that the minutes of the Sept 13, 2011 SRC International board of directors meeting make reference to the first tranche of the RM2 billion loan from the Retirement Fund Inc (KWAP), with part of the funds sent overseas.


Minutes of Najib-Nik Faisal meeting not admitted as evidence 

3.30pm - Judge Mohd Nazlan Mohd Ghazali allows an application from the defence for the minutes of an alleged meeting between then-premier Najib Abdul Razak and SRC International director Nik Faisal Ariff Kamil on Sept 7, 2011 not to be admitted as evidence.

Instead, Nazlan (photo) rules that the minutes can remain as ID499 for the moment. Under normal practice, an item marked as ID cannot have its contents ventilated in court proceedings. 

The prosecution can only make passing reference to the item, without asking any questions about its contents.

"Until foundational evidence on how it (the meeting minutes) was obtained by MACC is established, then it remains as ID for the time being," Nazlan rules.

Earlier, DPP V Sithambaram argued that the minutes should be admitted as evidence. 

This is because the Sept 7 minutes were incorporated into in the minutes of an SRC International board of directors meeting on Sept 13, 2011, according to the testimony of former SRC International director Ismee Ismail.

However, defence counsel Harvinderjit Singh argued that the document should remain marked as ID because of the contradictions between the Sept 7 and Sept 13 minutes.


2.35pm - Former premier Najib Abdul Razak reenters the dock as the trial resumes with the testimony of former SRC International director Ismee Ismail.


1.03pm - Proceedings break for lunch, and will resume at 2.30pm.


Defence cries minutes of Najib-Nik Faisal meeting 'fake' 

12.45pm - Najib Abdul Razak's defence team objects to the tendering of minutes of a purported 2011 meeting between the former premier and SRC International director Nik Faisal Ariff Kamil, claiming that it is a fake document.

Defence lawyer Harvinderjit Singh cites the "dubious" circumstances surrounding the document, including the date of its surrender to the MACC being unknown.

"He (former SRC International CEO Ismee Ismail) is not the maker (of the document), (this is) secondary evidence, he said it is a given copy," the lawyer tells the court.

"We object as we were given the document as late as May 2019. This was given to the MACC at an unknown date, and not given to us.

"The circumstances of this document are dubious. We are of the view that this is a fake document... unless my learned friend admits to marking of evidence."

In response, DPP V Sithambaram says that all the documents were seized by the MACC, and that the very existence of the meeting minutes means that it can be marked as evidence.

Sithambaram adds that the defence can still challenge the validity of the minutes at a later time.

The minutes are believed to contain discussions between Nik Faisal – who is still missing – and Najib over several matters concerning SRC International's operations during the meeting on Sept 7, 2011.

According to Ismee, this includes SRC International's line of reporting to Najib as the then-premier.

Ismee also testifies to the court that the contents of the minutes were briefed to SRC International's board of directors during a Sept 13, 2011 meeting, and were incorporated into its own minutes.

However, the witness also agrees to a suggestion by DPP Ishak Mohd Yusoff that only Nik Faisal and Najib would be able to verify the contents of the Sept 7 meeting minutes.


'First SRC directors' meeting discussed securing KWAP loan'

12.20pm - The first meeting by the SRC International board of directors already discussed securing a loan from the Retirement Fund Inc (KWAP), witness Ismee Ismail testifies.

Ismee (photo), who chaired the 2011 meeting, tells DPP Ishak Mohd Yusoff that its agenda was based on a directive from 1MDB – a shareholder of SRC International at the time.

Ishak: Did you attend the first SRC International board of directors meeting in August 2011?

Ismee: Yes I did.

Ishak: Can you explain why the first meeting included a discussion on (securing a) loan?

Ismee: The proposal was presented by (SRC International) management for us to accept a loan from KWAP with government guarantee at the time. There was an order from a shareholder.

Ishak: Can you tell who was the shareholder then?

Ismee: At that time it was 1MDB.

According to Ismee, the Minister of Finance Incorporated was a shareholder in 1MDB, and that then-finance minister Najib Abdul Razak usually signed its orders.

The witness also states that SRC International was later put directly under MOF Inc in February 2012.


Ex-CEO says he quit SRC over how Nik Faisal managed accounts

11.55am - 39th witness Ismee Ismail testifies that he resigned as CEO of SRC International on Aug 15, 2014 due to governance issues.

During examination-in-chief by DPP Ishak Mohd Yusoff, Ismee says that he disagreed with the way that SRC International director Nik Faisal Ariff Kamil managed the company's bank accounts.

"I resigned on Aug 15, 2014. I resigned as I disagreed with how the company was managed, especially by Nik Faisal in regard to the company's accounts.

"In regard to the procedures at SRC International, I raised the issue of governance, but Nik Faisal kept saying that the matter has been discussed and agreed to by the government," he says.

"I understood this to mean (Nik Faisal discussed the matter with then-prime minister and finance minister) Najib.

"Every action was brought by Nik Faisal and agreed to by Najib."


'Ultimate boss' Najib had influence over KWAP granting loan - witness

10.55am - Witness Azian Mohd Noh testifies that then-prime minister and finance minister Najib Abdul Razak was her "ultimate boss," and thus had influence over the Retirement Fund Inc's (KWAP) decision to grant a loan to SRC International.

During reexamination by DPP Ishak Mohd Yusoff, the former KWAP CEO says that even though there was no legal compulsion, Najib still wielded a certain degree of influence – given that he was the finance minister and that Ministry of Finance Inc owned SRC International.

"The words compulsion and influence give different connotations. There was no legal compulsion but I cannot say the same for the word influence," she says.

"The annotation in the (SRC International loan application) letter came from the prime minister and finance minister in charge of KWAP.

"He is my ultimate boss so I cannot deny there was a certain amount of influence."


'I articulated the words myself', ex-KWAP CEO says on witness statement

10.45am - Former Retirement Fund Inc (KWAP) CEO Azian Mohd Noh insists that she articulated a contentious paragraph in her witness statement on the RM4 billion in loans given to SRC International herself.

She denies defence lawyer Harvinderjit Singh's suggestion that the paragraph in question was prepared by authorities, as it reads similar to statements from previous witnesses from KWAP. 

Paragraph 56 of Azian's witness statement reads: "In my experience in working with KWAP, both loans to SRC totalling RM4 billion were among the biggest loans agreed to by KWAP."

Azian: I articulated the words myself.

Harvinderjit: Then you articulated the words to (KWAP vice-president of legal and secretarial affairs) Azlida Mazni Arshad too?

Azian: No.

Azlida, the 35th witness, had previously testified that the RM4 billion in loans were among the largest ever given out by KWAP.


Ex-KWAP CEO cannot recall what transpired in meeting with Najib

10.20am: Former Retirement Fund Inc (KWAP) CEO Azian Mohd Noh (photo) testifies that she does not remember what transpired in a March 22, 2012 meeting with then-prime minister Najib Abdul Razak.

Azian says this when defence lawyer Harvinderjit Singh refers to the meeting as stated in an email exchange between her and then-SRC International director Nik Faisal Ariff Kamil.

The email exchange concerns the RM2 billion KWAP loan to SRC International being disbursed in one lump sum rather than being staggered.

Harvinderjit: This email speaks of a meeting on March 22, 2012, between you, the chairperson of KWAP, the head of Treasury, and the deputy Treasury secretary-general with the then-finance minister cum prime minister Najib?

Azian: Yes.

Harvinderjit: You remember the meeting?

Azian: I remember attending the meeting, but I do not remember in detail the discussion that transpired in the meeting.

Harvinderjit: You did not take any notes during the meeting?

Azian: No. 


'MOF advice for additional KWAP loan not an order'

9.40am: Witness Azian Mohd Noh testifies that the Finance Ministry's advice for SRC International to obtain additional financing from the Retirement Fund Inc (KWAP) in early 2012 does not amount to a direction for the fund to grant the loan.

The former KWAP CEO says this during cross-examination by defence lawyer Harvinderjit Singh (photo) during cross-examination.

Harvinderjit: Do you agree that SRC International is basically saying (in a letter to KWAP in early 2012) that its shareholder, the Finance Ministry, agreed that SRC International should apply for a loan from KWAP?

Azian: Correct.

Harvinderjit: It is not a direction from the ministry for KWAP to grant the loan (to SRC International)?

Azian: Correct.

SRC International obtained RM2 billion loan from KWAP in late 2011, and another RM2 billion loan the following year.


Ex-PM enters the dock

9.13am: Najib enters the dock as judge Mohd Nazlan Mohd Ghazali prepares to get proceedings underway.

8.58am: The accused, clad in a cream-coloured suit, enters the court and takes a seat at the front row of the public gallery to await the beginning of proceedings.

Also seen entering the courtroom is his lead defence counsel Muhammad Shafee Abdullah.

8.52am: Attorney-General Tommy Thomas enters the courtroom and takes a seat at the front with other members of the prosecution team.

Najib Abdul Razak's defence counsel Harvinderjit Singh is also seen conferring with other members of the defence team in preparation of resuming cross-examination of former Retirement Fund Inc (KWAP) CEO Azian Mohd Noh.


After a long break for Hari Raya Aidilfitri, former prime minister Najib Abdul Razak's RM42 million SRC International trial for abuse of power, money laundering and criminal breach of trust continues into its 21st day.

All eyes will be on the 38th witness, former Retirement Fund Inc (KWAP) CEO Azian Mohd Nor, whose cross-examination by the defence will resume before Kuala Lumpur High Court judge Mohd Nazlan Mohd Ghazali.

On May 29, Azian's testimony touched on her June 2011 meeting with the then-prime minister to inform him about the decision of the KWAP investment panel to only approve an RM1 billion loan to former 1MDB subsidiary SRC International.

Earlier in 2011, SRC International had applied for a RM3.95 billion loan from KWAP. The panel eventually approved a loan of RM2 billion after obtaining a government guarantee.

However, there were gaps in her testimony on what transpired in her meeting with Najib and then-KWAP chairperson Wan Abdul Aziz Wan Abdullah.

This prompted Nazlan to ask her directly about the missing information,  particularly in relation to the sequence of events in her witness statement.

Paragraph 23 of her witness statement said that she and Wan Abdul Aziz went to meet Najib to inform him of the panel's initial decision to only grant SRC International an RM1 billion loan.

The next paragraph, however, states that former KWAP officer Amirul Imran Ahmat had prepared papers for the panel to consider approving an RM2 billion loan for working capital and general investment purposes.

Azian had responded by saying that she could not remember the sequence of events.

She added that she was later told by Wan Abdul Aziz to inform the KWAP investment panel of Najib's request to expedite the loan and that RM2 billion would suffice.

 

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