KUALA LUMPUR (Jan 7): Former Prime Minister Datuk Seri Najib Razak admitted in the High Court today that SRC International Sdn Bhd, which was formed to make sure Malaysia continues to have ample supply of energy resources, did not meet its objective.
Responding to deputy public prosecutor (DPP) Datuk V Sithambaram's suggestion that the running of SRC was a miserable failure, Najib said "we did not know it was so" at that time.
SRC, the acronym for Strategic Resource Company, was formed in 2011.
When Sithambaram suggested that there were no projects to justify the intended energy supply from SRC, Najib replied that the company's board should have done its job.
Sithambaram: But you (as the then finance minister and SRC advisor emeritus) should do your job?
Najib: I disagree.
Sithambaram: When the loan of RM4 billion was granted, nothing was done to realise this investment and justify the loan granted, despite you being the advisor emeritus of SRC?
Najib: The loan was granted as there were justifiable investment.
Sithambaram: Do you agree nothing actually materialised from the loan given in August 2011 and March 2012?
Najib: This is what we know today, but not at the material time.
Throughout this morning, the former premier tried to put the blame on the SRC board in not achieving its objective, and insisted the board had acted on what he now claims as forged minute documents and his forged signatures, in transferring the funds that the company obtained from a loan to overseas.
While the prosecution tried to show that Najib must have known that the SRC board was not functioning as planned, the former premier said he should have been alerted about this by the finance ministry's Minister of Finance Incorporated (MoF Inc) division.
Najib disagreed with the DPP that the RM4 billion loan given by Kumpulan Wang Persaraan Diperbadankan or Retirement Fund Inc (KWAP) to SRC, was to be taken overseas and later used for the former premier's benefit.
Noting there were no SRC board resolutions made or any director's circular's resolution issued between 2011 to 2018, Sithambaram said this shows no major decisions were made by the single shareholder of SRC (Mof Inc). Najib replied that the shareholders can decide if there is any decision by the board.
Putting money overseas should have SRC board approval
The prosecution also asked the former premier over SRC's move to transfer a huge chunk of the KWAP loan money overseas, where Sithambaram said it should have the shareholder's minutes, as it involves SRC’s capital.
Najib responded it should have and this led Sithambaram to question further, as to how could SRC send money overseas without referring to MoF Inc. The former premier said that too caught him by surprise.
“I did not inquire [as to] why the SRC transferred the money overseas,” Najib said.
At the prosecution stage, former SRC board of directors chairman Tan Sri Ismee Ismail had testified that Najib had instructed SRC to invest the loan money it had obtained from KWAP in banks in Switzerland, in order to get better returns.
SRC had transferred out RM1.8 billion from the RM2 billion loan it obtained in 2011, and RM1.8 billion from the second RM2 billion loan in 2012, for the purpose.
Sithambaram: Was this because the letter (from MoF Inc) was signed by you for the board to carry out?
Najib: I disagree.
Sithambaram: I put it to you that as the single shareholder having 100% stake in SRC, the MoF Inc was not interested with what it was doing with the RM4 billion loan and the RM3.6 billion that had been transferred out.
Najib: That you have to ask MoF Inc.
While Sithambaram posed that Najib as the prime minister and finance minister, was responsible for giving the government guarantee for SRC but had shown no interest in getting the money back, the Pekan MP replied he had faith on the SRC management, as it comprised people with a lot of experience.
Sithambaram: I put it to you that the SRC board had actively pursued your (Najib's) minutes as shareholder, and this is reflected in the minutes as tendered?
Najib: I disagree
Sithambaram: You knew that the board was acting in the minutes of shareholder and that you did not interfere with the board, as it carried out your directions?
Najib: I disagree
Sithambaram: You were the one controlling SRC as revealed by Ismee?
Najib: I disagree
The prosecution further tried to point to Najib that he did not make an effort, being the then prime minister and finance minister, to have the RM3.6 billion that was sent to Swiss banks, returned.
However, Najib said he had believed the money was still there, and that it should have been the SRC board that should have made the effort.
You should have stepped down
Sithambaram had suggested Najib should have stepped down from his post as finance minister, when he had found out that SRC — owned by MoF Inc — had misappropriated the RM4 billion KWAP loan.
Grilled further about his role in allowing RM3.6 billion of the RM4 billion loans to end up in foreign banks, the former premier said he did not enquire about the funds, as he left it to the board as it was responsible for the matter.
Sithambaram further asserted Najib did not do anything as finance minister, although the alarm bells were ringing and that if something like this happened in the Westminster model of government, the finance minister would have resigned.
Najib however disagreed with the suggestion, adding he reserved his comments on this subject, as he wanted to say a lot more and there were many examples that he could give.
While the former premier tried to allude on the loss of RM32 billion in foreign currency suffered by Malaysia during the 1990s, when the country was involved in currency trading, Sithambaram cut him off, saying: “It’s okay sir. This is my case. Please don’t make a political speech.”
“You are the one suggesting it. So if an aeroplane goes missing, the minister of transport must resign? Ridiculous,” Najib responded.
Sithambaram: Datuk Seri, I'm suggesting to you that you should take responsibility in this case.
Najib: Disagree.
The heated argument between the former prime minister and Sithambaram over the matter stopped. after Judge Mohd Nazlan Mohd Ghazali told them to move on to the next question.
The hearing continues tomorrow.
The Edge is reporting the proceedings of the SRC trial live.