Investment panel had questioned capability and credibility of SRC’s management team to venture into industry that requires high skills

by RAHIMI YUNUS / pic by RAZAK GHAZALI

Former Prime Minister Datuk Seri Mohd Najib Razak had asked the Retirement Fund Inc (KWAP) to expedite a RM2 billion loan request in 2011, according to a
witness.

KWAP’s legal and secretarial department VP Azlida Mazni Arshad told the High Court Kuala Lumpur yesterday that Najib had informed former KWAP chairman Tan Sri Wan Abdul Aziz to speed up the approval process of the RM2 billion credit facility, as informed by the pension fund’s former CEO Datuk Azian Mohd Noh in an investment panel meeting on July 18, 2011.

In that meeting, Azlida Mazni said KWAP’s fixed loan department presented the investment proposal with stricter terms and conditions including to have a Malaysian
government guarantee — a corporate guarantee from 1Malaysia Development Bhd (1MDB) and a
letter of comfort/awareness from the Finance Ministry (MoF).

The fixed loan department also proposed additional terms of no change of ownership for SRC International Sdn Bhd and the former 1MDB’s subsidiary to be placed under the MoF Inc.

Azlida Mazni said the investment panel viewed that, among others, the RM2 billion loan proposal was too large for a company with a paid-up capital of RM2.

The committee had initially approved a RM1 billion loan proposal out of a RM3.95 billion loan first requested by SRC.

“The investment panel had questioned the capability and credibility of SRC’s management team to venture into natural resources industry that requires high skills,” Azlida Mazni told the High Court on the 16th day of the trial.

Additionally, she said the investment panel was aware of the risks associated with the proposed investment for KWAP, particularly on risk of payment, “over-concentration”, country and industry.

The prosecution’s 35th witness also testified that Nik Faisal Ariff Kamil, an acting SRC CEO at the material time, requested the RM2 billion loan to be disbursed in
one lump sum instead of through a progress payment on justifications that the company was a subsidiary of 1MDB and the loan was backed by a government guarantee.

She said six investment panel committee members which included the KWAP chairman, the investment panel chairman Datuk Mohd Azlan Hashim and former Minister in the Prime Minister’s Department Tan Sri Abdul Wahid Omar, approved the RM2 billion facility with exemptions of Paragraph Two and Five under on the pension fund’s guidelines.

KWAP issued a RM2 billion offer letter to SRC on Aug 23, 2011, the court was told.

On Feb 8, 2012, Azlida Mazni testified that SRC applied for a permission from KWAP for the company to change ownership from being under 1MDB to MoF Inc.

SRC had requested for a second round of RM2 billion facility from KWAP, which was offered on March 23, 2012.

Witnesses from KWAP — Azlida Mazni, former KWAP assistant VP Amirul Imran Ahmat, former KWAP’s investment settlement department VP Amirah Muhamad Nor and Ambalagam R Marappan who once served as the director of accounts and management services department — had testified that the total RM4 billion loaned to
SRC was one of the biggest facilities it had ever approved.

Meanwhile, earlier in the proceeding yesterday, the prosecution raised that Najib was widely reported on social media to have taken a selfie from the dock in court, in breach of court etiquette.

In response, lead defence counsel Tan Sri Muhammad Shafee Abdullah said his client was merely using his selfie camera as a mirror to check on his appearance.

Najib stood up and affirmed that he had used his device to look at his reflection.

“If they want to be treated as the fourth estate, they should not act like the people from estates,” Muhammad Shafee said, in reference to a news report.

Judge Mohd Nazlan Mohd Ghazali accepted his explanation, but warned anyone caught taking photos in an open court would need to surrender the mobile device in the future.

Meanwhile, former Treasury secretary general Tan Sri Dr Mohd Irwan Serigar Abdullah (picture) was at the court for the case mention of charges related to the International Petroleum Investment Co (IPIC) trial, which also  involves Najib.

Both of them face six charges of criminal breach of trust (CBT) involving RM6.64 billion of government funds.

The IPIC trial was originally set for July, but had to be reassigned to make way for the completion of the SRC trial.

Judge Mohd Nazlan has tentatively fixed December 2019, January 2020 and February 2020 to hear the case. He also fixed May 14 for the prosecution and defence to finalise the dates for the trial.