Najib defends move to greenlight RM3.95b funding for SRC

Najib Abdul Razak defended his move to greenlight then SRC International CEO Nik Faisal Ariff Kamil’s application for RM3.95 billion funding from Retirement Fund Incorporated (Kwap).

The former prime minister and finance minister testified he wished for the company under the Minister of Finance Incorporated (MOF Inc) to be able to carry out its objective of seeking new renewable energy.

During the hearing of SRC’s US$1.18 billion lawsuit against him before the Kuala Lumpur High Court today, Najib explained his reason for minuting “I agree” on Nik Faisal’s letter dated June 3, 2011.

The defendant was explaining his reasons during cross-examination by SRC's counsel P Gnanathan.

Najib: I wanted SRC to have sufficient capital.

Gnanathan: To carry on investment?

Najib: Yes.

When Gnanathan asked whether Najib himself had identified what SRC would be investing in before minuting his agreement to Nik Faisal’s letter, the ex-finance minister said that was the duty of the company’s management team.

“That is the job of management, not my job,” he said, adding that he had faith in SRC’s management then to execute the investment properly.

‘Management responsible’

Previously, he testified that it was the duty of SRC management to determine the validity of the investment and he could not micromanage the company as he was also the prime minister then.

SRC is suing Najib over his alleged breach of fiduciary duty due to the misappropriation of US$1.18 billion (about RM3.6 billion) of loans that the company received from Kwap between 2011 and 2012.

However, the defendant contended that the persons responsible for the financial misuse at the company were members of its management headed by Nik Faisal and board chairperson Ismee Ismail.

Incidentally, Najib is currently serving a six-year jail sentence since August 2022 over a separate criminal case involving RM42 million of funds from SRC, a fully-owned company of the MOF Inc.

He was convicted of receiving the RM42 million as gratification for ensuring two government guarantees for two Kwap loans totalling RM4 billion to SRC. Kwap is under the Finance Ministry.

Najib was also adviser emeritus to SRC.

Incidentally, authorities are still trying to locate Nik Faisal.

Hearing before civil court judge Ahmad Fairuz Zainol Abidin resumes tomorrow.

During the suit hearing, Najib among others, testified that he was baffled with why SRC board members did not verify the transactions with him and that one of his bank accounts was for “corporate social responsibility” (CSR) initiatives.

‘Najib personally benefitted from SRC funds’

Under new management, SRC filed the lawsuit in May 2021, alleging that Najib committed a breach of trust and abuse of power, personally benefited from the company’s funds, and misappropriated billions of ringgit.

SRC is also seeking a court declaration that the defendant is responsible for its losses due to a purported breach of duties and trust, and for Najib to repay RM42 million.

The plaintiff is also seeking a court order for Najib to be made accountable for the former’s US$1.18 billion loss and repay US$120 million of funds that allegedly flowed into his bank account.

The civil action against Najib is linked to the alleged misappropriation of part of RM4 billion - RM3.6 billion or US$1.18 billion in foreign exchange rates between 2011 and 2012 - in loans that the company received from Kwap between 2011 and 2012.

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