KUALA LUMPUR – The high court heard that if Datuk Seri Najib Razak had acted on the advice of the board of directors, SRC International Sdn Bhd would not have incurred any losses from the investment of RM3.6 billion belonging to Retirement Fund Inc (KWAP).
Former director of the company, 75-year-old Datuk Che Abdullah @ Rashidi Che Omar, pointed out that SRC International operated differently from other publicly listed companies, with its ultimate decision-making authority resting with the former prime minister.
“Najib was the sole shareholder and advisor emeritus of the company and he decided to invest RM3.6 billion into the company. As a matter of fact, the board did advise the management, who claimed to have direct communication with Najib, to liquidate the investment while the US dollar was firming up.
“If Najib acted under the board’s advice, I strongly believe the company would not have suffered any losses or at the very least mitigated their loss if any. Thus, blaming me and the other (board members) is an afterthought and without basis.
“Najib was involved in passing the shareholder’s resolution of the company in instructing SRC International to transfer RM3.6 billion to SRC BVI, as one of the company’s investment plans,” he said, adding that he did not have the power to overrule the investment as it was decided by Najib.
Che Abdullah reiterated this stance both in his witness statement and during questioning by Najib’s lawyer, Muhammad Farhan Muhammad Shafee, in SRC International’s US$1.18 billion (RM5.6 billion) civil suit against Najib and its former chief executive Nik Faisal Ariff Kamil.
Che Abdullah said he was not involved in the loan application or approval as it was already approved when he joined the company and he did not know the purpose of the loans.
“My involvement was only approving the shareholder’s resolution which was presented to the board. I did not think that the board could contradict the shareholders’ resolution since the shareholder’s decision superseded the board’s decision. Furthermore, Najib was involved in passing and approving the shareholder’s resolution,” he said.
He also told the court that the board received clear instructions via a letter from the shareholder, Najib, that SRC International should not interfere with the operation of SRC BVI.
Explaining what happened to the RM3.6 billion, Che Abdullah said the company’s board was briefed by a BSI Bank officer from time to time on the status of the investment, and on one occasion when the US dollar was firming up, Che Abdullah had requested to liquidate the investment within a year.
“Since the liquidation of the investment did not materialise, I resigned from the company. Whenever we asked Nik Faisal to repatriate the funds, he made excuses that the currency rate was low. I was dissatisfied with Nik Faisal as he was unable to repatriate the money,” he said, adding that during his tenure in the company he never met Najib in person or spoke to him personally.
Nik Faisal, who absconded from the country, was one of SRC International’s signatories. For the record, SRC International took a loan of RM4 billion from KWAP between 2011 and 2012, out of which RM3.6 billion was transferred to a Swiss bank account that is currently frozen by the Swiss authorities.
SRC previously removed five of its directors from the suit, including Che Abdullah, retaining Najib as the sole defendant. However, the high court later granted Najib permission to issue third-party notices against them.
Under new management, SRC filed the suit in May 2021, claiming that Najib had committed a breach of trust and abuse of power, personally benefited from the company’s funds, and misappropriated the same.
It is seeking a court declaration that Najib is responsible for the company’s losses due to his breach of duties and trust and for him to compensate the RM42 million in losses they have incurred.
Najib, 70, has been serving a jail sentence at Kajang Prison since August 23, 2022, after being convicted of misappropriating RM42 million in SRC International funds.
On September 2, 2022, he submitted a petition for a royal pardon, and on January 29 this year the Pardons Board decided to halve Najib’s prison sentence from 12 to six years, along with reducing the fine from RM210 million to RM50 million.
The trial before judge Datuk Ahmad Fairuz Zainol Abidin continues tomorrow. – May 8, 2024