KUALA LUMPUR (Aug 3): The High Court has today instructed former prime minister Datuk Seri Najib Razak and two former SRC International Sdn Bhd directors Datuk Mohammed Azhar Osman Khairuddin and Datuk Che Abdullah @ Rashidi Che Omar to file their defence to the US$1.15 billion suit filed by the company by Aug 30.
The directive was made by Justice Datuk Ahmad Fairuz Zainol Abidin following case management which was done via video conferencing today.
This follows SRC having filed its statement of claim on Friday (July 30), after it filed its writ to the suit on May 7 this year in a plethora of legal actions on that day.
Justice Ahmad Fairuz also directed the company to file its reply to their defence by Sept 30, and the court will have its next case management on Oct 4.
The court also directed SRC, which was represented by lawyer Lisa Yong, to look into the possibility of utilising substitute service to serve the documents on the fourth defendant, namely Nik Faisal Ariff Kamil, who was said to be Najib's right-hand man in the company. Nik Faisal had left the country.
Today, Najib was represented by Muhammad Farhan Shafee while counsel Datuk Loh Siew Cheang appeared for Azhar, and Wan Shahrizal Wan Ladin appeared for Rashidi.
Datuk Suboh Md Yassin, the other former director who was named as a defendant, was not represented.
Last week, it was reported that SRC has dropped its former chairman Tan Sri Ismee Ismail and former director Datuk Shahrol Azral Ibrahim Halmi from the list of defendants in the suit.
Suboh and Ismee had testified in the SRC criminal trial involving Najib, while Shahrol had also testified against the premier in the ongoing 1MDB trial.
Najib had been found guilty by the High Court on July 28 last year on seven counts of abuse of power in relation to the Retirement Fund Inc (KWAP) RM4 billion loan in 2011 and 2012, and criminal breach of trust and money laundering of RM42 million of SRC funds.
For this, the 68-year-old Najib was sentenced to 12 years' jail and fined RM210 million, against which his appeal is still pending a decision at the Court of Appeal.
SRC claims defendants committed breach of duties, trust, dishonest assistance
SRC, in its 80-page statement of claim filed on Friday (July 30) against the defendants, claimed that in respect to the suit against Najib, Suboh, Azhar, Rashidi and Nik Faisal, the company is accusing them of breach of duties, breach of trust, receipt of wrongful property, dishonest assistance, conspiracy and wrongful conversion of SRC property.
According to the statement of claim, the defendants were also allegedly involved in abuse of power or authority, dishonesty and misappropriation of SRC funds and acting with the knowledge or probability of harming the company.
The company claimed Najib as the advisor emeritus and leader of the government supported the company and gave the go-ahead for it to get the RM4 billion KWAP loans in 2011 and 2012, leading to the bulk of the funds being transferred overseas and not recovered.
It claimed that Najib changed the investment structure of which the loans were supposed to be utilised — from the facility agreement — going against Bank Negara Malaysia's (BNM) requirements.
SRC as the abbreviation suggests, meaning Strategic Resource Company, was meant to meet Malaysia's alternative energy needs from its reliance on petrol and coal.
The firm further showed the money trail in the utilisation of the fund, including a sum of US$120 million that had allegedly gone into the former premier's account or placed under his control and a sum of US$82,000 that was allegedly transferred to his proxy Nik Faisal.
The firm claimed that after Najib's fall from power, detailed investigations were done on all the transactions, and it noticed that crucial documents linked to the fraud committed against SRC were destroyed.
In January 2019, the company was placed under the care of the Ministry of Finance (MoF), where the various fraudulent transfers and embezzlement of money were discovered.
SRC claimed that Najib helped approve the KWAP loans in a bid to misappropriate and embezzle the funds.
The company further claimed that Suboh, Nik Faisal, Azhar and Rashidi ought to have known that the proposed investment funds were for the specific purpose of investment activities but were instead utilised for something else, where they authorised the utilisation of the funds resulting in the fraudulent or wrongful transfers.
The company also claimed that the four of them conspired to wrongly injure SRC, resulting in it going against BNM's requirements.
Hence, SRC is seeking a declaration from the High Court that Najib and the four others are liable to account for the losses due to their fraudulent breach of duties and trust.
The company also seeks an order that they pay the US$1.18 billion in losses suffered by the company and damages for breach of duties and trust.