Najib claimed ignorance on SRC International as he faced prosecutors last week

Lawyer told High Court that operational matters were not under Najib’s purview, but the management of SRC International


FORMER Prime Minister (PM) Datuk Seri Mohd Najib Razak had defended that he is not liable for the mess of SRC International Sdn Bhd and mismanagement of the RM4 billion loans, by testifying that he was not aware or it was an operational matter.

For the first time last week, Najib was being cross-examined by the lead prosecutor Attorney General Tan Sri Tommy Thomas.

Prior to that, for the past two weeks, Najib’s defence team had argued that his role was only at the policy level, particularly with regards to the approval of the government guarantees by the Cabinet.

The ex-finance minister’s lawyer Tan Sri Muhammad Shafee Abdullah also told the Kuala Lumpur High Court that operational matters were not under Najib’s purview, but the management of SRC International.

Thomas also brought up the fact that the govt had to provide 3 tranches of short-term loans to SRC International to help the company service its interest payment with KWAP – pic by BERNAMA

Thomas: The theme of your testimony is on macromanagement whereby you were only involved in policy and big decision-making. There is difficulty to determine what qualifies as macromanagement or micromanagement.

Najib: Yes. I would not know unless some parties inform me about what happened over something undesirable against the principle of good governance.

The former SRC International advisor emeritus testified that he was not aware that a US$600 million (RM1.8 billion) of SRC International funds were parked at Bank Julius Baer & Co Ltd in Hong Kong.

Besides Hong Kong, a multimillion sum of monies belonging to the company were also kept in a bank in Switzerland in 2012, and were frozen by the local authority.

SRC International, a unit of 1Malaysia Development Bhd, raised RM4 billion capital via debt facilities that were provided by the Retirement Fund Inc (KWAP) — RM2 billion each in 2011 and 2012.

Najib also testified he was not aware that SRC International funds had been kept at overseas banks as it was an operational issue and that he did not micromanage the company.

Thomas argued that Najib had done nothing to recover the frozen funds in Switzerland, but tried to contain the real facts of the alleged misappropriated monies.

Najib, in response, asserted that it was SRC International management’s duties as it was an operational matter.

Nonetheless, he admitted that SRC International suffered a serious cashflow problem since 2015.

Thomas: What steps had been taken by you to find out about the RM4 billion?

Najib: We instructed SRC to take action and bring back the monies. The management was supposed to do it. Thomas: Did you summon the directors and ask them what happened?

Najib: I did not summon them, but the Minister of Finance Inc (MoF Inc) had instructed them to take efforts.

Thomas: I put it to you that you did nothing as far as SRC is concerned.

Najib: Totally wrong. SRC was supposed to do it. I am aware that SRC had a serious cashflow problem. MoF Inc wanted to find solutions over the frozen funds and bring them back to Malaysia.

Thomas: I put it to you that SRC became insolvent? Najib: I disagree.

Thomas: By the time you (were) ceased from being a PM in 2018, nothing (monies) came back. I put it to you that the RM4 billion has vanished and misspent.

Najib: I disagree. We could not determine the funds and I wanted to know.

Thomas also brought up the fact that the government had to provide three tranches of short-term loans to SRC International — RM100 million in 2015, RM250 million in 2016 and RM300 million in 2017 — to help the company service its interest payment with KWAP.

These were on top of the two government guarantees tied to SRC International’s RM4 billion loans.

On the first government guarantee, Thomas showed that it was approved before the SRC International’s first board meeting.

The first government guarantee was approved by the Cabinet on Aug 17, 2011, but the board held its inaugural meeting on Aug 23, 2011.

On that Aug 23 board meeting, Thomas said the language of the directors’ resolution was “we ‘accept’ the RM2 billion debt facility”, instead of “apply for the loan”.

Najib disagreed with the notion that the government guarantees were not arm’s length transactions and they were the sole justifications for KWAP to approve the RM4 billion debt facilities.

Thomas: The only reason why the KWAP investment panel approved the second RM2 billion loan was because of the government guarantee.

Najib: They could have rejected it.

According to Najib, the government guarantees were expedited and approved by the Cabinet despite without sufficient supporting documents due to SRC being a national strategic company and it was supported by the Economic Planning Unit.

Additionally, he also testified that the US$130,625 (RM466,330.11) Chanel watch gifted to his wife Datin Seri Rosmah Mansor in 2014 was meant to make up for cutting a family holiday short due to flood situation in Kelantan.

The defendant said he would normally spend time with his family between 10 days to two weeks on a holiday.

In turn, the father of five testified that he let Rosmah choose her birthday present herself.

He also said RM127,017.46 was spent by credit card at Shangri-La Hotel in Bangkok in January 2015 during a private holiday, which he then took the chance to meet Thai PM Prayut Chan-O-Cha to discuss ways for Thailand to assist the flood-affected Kelantan.

Najib asserted that he had the right to use a portion of funds channelled into his bank accounts for personal purposes.