This article first appeared in The Edge Malaysia Weekly on October 28, 2019 - November 3, 2019

THE defence in Datuk Seri Najib Razak’s SRC International Sdn Bhd trial submitted that the prosecution has not proven that the former prime minister had committed abuse of power and criminal breach of trust (CBT) that resulted in RM42 million going through his bank accounts.

As such, this negates the charges under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001.

Section 4 (1) of the Act states that any person who engages in a transaction that involves proceeds of an unlawful activity would have committed a money-laundering offence.

The defence emphasised the point on “unlawful activity”, otherwise known as the predicate offence to the laundering of money.

It highlighted that Najib has not been proven to have committed CBT (under Section 409 of the Penal Code) or abuse of power (under Section 23 of the Malaysian Anti-Corruption Commission Act 2009), which the prosecution had cited as the predicate offences.

In its submission, the defence stated that the RM42 million that is referred to in the three money-laundering charges, therefore, cannot be proven to be the proceeds derived or obtained directly or indirectly from the predicate offences that make up the unlawful activities.

“You have to be clear under money laundering, what the predicate offence is,” said lead counsel Tan Sri Muhammad Shafee Abdullah during submission.

The defence further argued that the mere fact that the money was transferred to Najib’s AmBank accounts does not prove the commission of the offence in the charges.

Najib was not subservient to SRC

On the three CBT charges, lawyer Harvinderjit Singh said Najib’s position then as prime minister, minister of finance and adviser emeritus of SRC International was not subservient to SRC and does not meet the definition of “agent” in the Penal Code.

Apart from that, he argued, the finance minister does not equate to the Minister of Finance Inc (MoF Inc), the sole shareholder of SRC, and, therefore, the acts of the body corporate are separate from those of the finance minister.

Given that MoF Inc is the shareholder of SRC, the lawyer said shareholders are not agents of a company and owe no fiduciary duty to the company.

Another point highlighted by the defence is that the evidence by the prosecution does not establish that the prime minister, adviser emeritus or finance minister was entrusted with dominion over SRC’s funds, whether directly or indirectly.

Harvinderjit also submitted that the board did not act blindly under Najib’s instructions and that the board, at all material times, was completely aware of and acted in accordance with its absolute decision-making powers.

Shafee submitted that the prosecution had failed to prove that there was an element of misappropriation and dishonesty on Najib’s part. This follows the lawyer’s claim that Najib continuously believed that the money he had spent was still part of the “Arab donation money”, which he had received earlier.

By definition, he said, misappropriation is when one takes possession of a property and acts as if it is his own and, therefore, the prosecution must prove that the accused received the money and intentionally retained it.

“My client does not have dominion of SRC because as the adviser, he cannot dispose of the assets of the company. He could not do anything about it,” he said.

No evidence to show abuse of power

On the abuse of power charge, the defence contended that there is no evidence to show any corrupt arrangement that Najib can be said to be a party to, in the events leading up to the granting of the government guarantees and the approval of two loans by Kumpulan Wang Persaraan (Diperbadankan) to SRC, amounting to RM4 billion.

The defence also said the bulk of evidence presented does not demonstrate a connection between Najib’s participation in matters relating to the government’s decision to grant the guarantees to SRC in 2011 and 2012, and the RM42 million that was transferred to his accounts in 2014 and 2015.

In fact, it said, the transactions involving the RM42 million were carried out without Najib’s knowledge and involvement at the behest of others for their own ulterior purpose and benefit.

“The conclusion, therefore, is that the RM42 million cannot be said to amount to gratification as consideration for the use of office of position by Datuk Seri Najib,” wrote the defence in its submission.

For this reason, the defence submitted that the prosecution has not proven a prima facie case against Najib.

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