Najib: I had faith in SRC board to do due diligence

Former prime minister Najib Abdul Razak testified he had full confidence in SRC International’s board to perform due diligence over billions of ringgit in investment.

He told the Kuala Lumpur High Court that he had communicated to the firm’s then-CEO Nik Faisal Ariff Kamil about “imminent investments”.

The former adviser emeritus to SRC said he relied on Nik Faisal to communicate with the board on the feasibility of seeking billions of ringgit in loans from Retirement Fund Incorporated (Kwap) for investment in renewable energy.

During cross-examination by SRC’s counsel P Gananathan, Najib, 71, expressed he had faith then in the board to ensure everything was properly handled.

Gananathan: All you did was agree with Nik Faisal’s proposal and forwarded it to the Economic Planning Unit (EPU)? You asked no questions as finance minister?

Najib: It is for Nik Faisal to deal with the board. All along I had faith in the board.

The former finance minister added that it was not for him to deal with the board and that this duty fell on the management headed at the time by Nik Faisal, who is currently at large.

Najib: It’s not for me to deal with the board, (that is the) management’s (duty).

Previously, he testified that it was the duty of SRC’s 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.

Kwap had given a total of RM4 billion in loans to SRC in two tranches.

However, the defendant contended that the persons responsible for the financial misuse at the company were members of its management headed by Nik Faisal, among others.

Incidentally, Najib has been 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 purview of the Finance Ministry.

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

During the suit hearing, Najib among others, testified that he was baffled by 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 the former Pekan MP to be made accountable for its 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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