SRC International transferred to MoF Inc without due diligence, says witness

Mat Noor says Najib signed the draft memorandum on the hood of the car


A FORMER official at the Ministry of Finance (MoF) said SRC International Sdn Bhd was transferred to MoF Inc without going through due diligence.

Datuk Mat Noor Nawi, former deputy secretary general at the MoF, testified that such exercise should have been conducted by the end of 2012 as one of the recommended procedures to be executed prior to the change of ownership of SRC International from 1Malaysia Development Bhd (1MDB) to MoF Inc.

“As far as I know, no due diligence was made during my tenure at MoF until November 2012,” Mat Noor told the High Court yesterday.

“Up to November 2012, there was no due diligence taken even though the transfer was done in February 2012. Why?” deputy public prosecutor Datuk Suhaimi Ibrahim asked, to which Mat Noor replied that he did not know why.

During cross examination, Mat Noor, however, could not ascertain whether the due diligence process was ever taken as he retired from MoF in November 2012.

SRC International was placed under MoF Inc in February 2012, following a memorandum draft signed by former Prime Minister (PM) Datuk Seri Mohd Najib Razak (picture).

The draft memorandum was a followup after a letter by SRC International dated Jan 9, 2012, addressed directly to Najib as the then-PM and finance minister, stating the intention for the change of ownership.

The letter was signed by the company’s ex-MD and CEO Nik Faisal Ariff Kamil.

Mat Noor said this was viewed as a top-down approach in the decision making as the request was directed to the PM.

The prosecution’s 44th witness said this was against the ministry’s norms as a bottom-up way would be usually used when companies apply to MoF, and the proposal will be processed and escalated to the top management including to the Treasury secretary general, second finance minister and finance minister.

As it was, Mat Noor said Najib signed and endorsed the draft memorandum in a brief meeting at the Royal Malaysian Air Force landing site at the Subang Airport.

He said Najib simply signed the draft memorandum on the hood of the car.

The 64-year-old witness said the acquisition of SRC International by MoF Inc did not involve any cash, but through share transfer or dividend-in-specie. Meanwhile, a former secretary at the MoF’s financial market and actuarial loan management division, Datuk Maliami Hamad, testified that the ministry had difficulties issuing a government guarantee letter for SRC International due to new loan utilisation term.

The prosecution’s 43rd witness said a Cabinet meeting had decided on Feb 8, 2012, that the RM2 billion loan to SRC International was only allowed for general investment in natural resources sector.

However, he said SRC International insisted that the credit facility be expanded for utilisation in working capital.