This article first appeared in The Edge Financial Daily on July 9, 2019

KUALA LUMPUR: A senior official with the ministry of finance (MoF) testified yesterday that former prime minister Datuk Seri Najib Razak had ordered a memorandum detailing SRC International Sdn Bhd’s bid for a government guarantee to secure a RM2 billion loan from the Retirement Fund (Inc) (KWAP) in 2011 be prepared quickly.

Retired MoF secretary (management, loan, capital market and actuarial) Datuk Maliami Hamad, the prosecution’s 43rd witness, said he was pressured to prepare the memorandum in time for a cabinet meeting on Aug 17, 2011 and claimed that Najib was behind the memorandum.

“There was limited time. The directive to prepare the cabinet memorandum does not only come from SRC but also the then secretary-general Tan Sri Dr Wan Abdul Aziz Wan Abdullah whom I know was directed by Najib.

“I also received a similar directive from the late Datuk Azlin Alias (the principal private secretary to Najib). I believe that Azlin’s directive came from the prime minister. The oral directive received is to ensure that the memorandum [for SRC to get the government guarantee] received approval from the cabinet within the same week,” he said during examination-in-chief by deputy public prosecutor Datuk Suhaimi Ibrahim.

He added that his subordinate officers, including Afidah Azwa Abdul Aziz — the MoF’s strategic investment division principal assistant secretary and prosecution witness No 41 — were also pressured to ensure the memorandum was considered and approved on the same day.

The witness said it was the first time he had ever had to prepare a cabinet memorandum proposing a government guarantee to back a company’s loan request in just one day.

He reaffirmed Afidah’s earlier testimony that it was highly unusual for the MoF to prepare memoranda on behalf of companies.

Maliami added that normally, the memorandum would be brought to then finance minister II Datuk Seri Ahmad Husni Hanadzlah, but he was ordered to give the document to Tan Sri Nor Mohamed Yakcop — who was the minister in the prime minister’s department in charge of the Economic Planning Unit at the time— instead.

The memorandum was eventually signed and approved by Nor Mohamed on Aug 15, 2011, the same day it was prepared by Afidah.

He said MoF then informed SRC that the cabinet had approved the government guarantee and that the guarantee was signed by Ahmad Husni on Aug 26, 2011.

Loan given out before govt guarantee issued as SRC needed second RM2b loan ‘urgently’

Maliami said SRC then asked for a second government guarantee in a letter dated Jan 31, 2012 for the second RM2 billion loan from the pension fund.

However, the loan was disbursed months before the government guarantee was given.

The witness testified that Najib had unusually signed a support letter for the cabinet memorandum as the prime minister and finance minister dated Feb 3, 2012.

“I got to know the cabinet approved the guarantee on Feb  8, 2012. I was asked to sign a letter on behalf of MoF to KWAP to release the funds before the government guarantee letter was issued,” Maliami added.

“At that time, the government guarantee was not yet prepared and a letter of guarantee dated March 11, 2012 was made as SRC needed the funds immediately.

“This is the first time that an entity issuing the loan has to come give the funds first before the government guarantee is issued,” he said, adding the guarantee was only given on May 18, 2012.

Meanwhile, SRC also asked for an amendment to conditions on the loan given and as a result MoF had to prepare a memorandum to amend the purpose of SRC asking for the loan from KWAP, Maliami said.

It was subsequently amended from investing in “natural resources” to “natural resources and working capital”, he added.

Najib faces multiple counts of criminal breach of trust, money laundering and abuse of power involving a total of RM42 million SRC funds.

He is alleged to have received RM27 million and RM5 million on Dec 26, 2014, and another RM10 million on Feb 10, 2015.

The hearing before Justice Mohd Nazlan Mohd Ghazali continues today.