MoF paid RM1.7b SRC International’s debts to KWAP

by DASHVEENJIT KAUR/ pic by MUHD AMIN NAHARUL

THE Ministry of Finance (MoF) has paid RM1.73 billion of SRC International Sdn Bhd’s debts to the Retirement Fund Inc (KWAP), with the latest payment of RM43 million made on Oct 1 this year.

“The total payment made by the MoF for SRC International Sdn Bhd now is RM1.73 billion,” Finance Minister Lim Guan Eng (picture) said in a statement on Tuesday.

“From that amount, the latest payment made on Oct 1, 2019, was interest of RM43,023,748.31.”

According to the payment schedule, Lim said the next date of payment would be on Feb 28, next year involving RM37,806,311.73 in interest.

Lim assured that despite the government’s fiscal situation, it will still ensure that enough funds would be allocated to honour the debt schedule.

“Given that most of these funds have been used around the world, the government is taking appropriate steps to restore as much the RM4 billion in funds. SRC International has been in critical financial situation since 2015, leaving it unable to meet payment obligations with KWAP.

“The new government will ensure that such misconduct that causes major losses will never occur again,” said Lim.

Of the RM4 billion borrowed funds, RM3.6 billion (US$1.1 billion) was transferred through several offshore subsidiaries to several offshore entities and banks, including; BSI Bank in Switzerland (over US$800 million), Bank of Julius Baer & Co. Ltd in Hong Kong (US$250 million) and a coal exploration company in Mongolia (US$60 million).

Last month, Lim announced that the government, through SRC, will be taking civil action to recover the fund and also working alongside authorities in the respective countries to track down the money.

On June 15, the 41st prosecution witness of the former Prime Minister Datuk Seri Mohd Najib Razak’s SRC trial, Afidah Azwa Abdul Aziz, told the court that SRC International owed KWAP RM4.15 billion after borrowing RM4 billion in 2011 and 2012.

The company, whose accounts were frozen in 2015, has defaulted on its loan payments in 2015, 2016 and 2017, and it had to obtain a loan from the government to prevent an event of default.

Afidah, who is the deputy secretary of the MoF’s strategic investment division, said the government then had to step in as it guaranteed the loan.

MoF took over SRC International from 1Malaysia Development Bhd in 2012, before taking a second loan from KWAP.

Najib is currently facing seven charges of abuse of position, criminal breach of trust and money laundering over RM42 million of SRC International’s funds at the Kuala Lumpur High Court.

Justice Mohd Nazlan Mohd Ghazali has fixed Nov 11 for decision on whether Najib would have to enter defence or to be acquitted from the charges.