Friday 29 Mar 2024
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PUTRAJAYA (Dec 8): Court of Appeal Judge Datuk Abdul Karim Abdul Jalil said on Wednesday (Dec 8) that Datuk Seri Najib Razak was the “directing and controlling mind” of ex-1Malaysia Development Bhd (1MDB) subsidiary SRC International Sdn Bhd by virtue of Najib being the finance minister, prime minister and SRC's advisor emeritus when Najib committed criminal breach of trust involving RM42 million of SRC's money in 2014 and 2015.

Justice Abdul Karim, when reading portions of the Court of Appeal's 200-page decision to reject Najib's appeal to set aside his conviction in the SRC case, said there is evidence showing that Najib issued shareholder instructions which the directors of SRC had to follow based on Najib’s positions as finance minister and prime minister.

“…not merely as shareholder’s instructions, but instructions issued by the prime minister who appointed those directors to the office,” Justice Abdul Karim said.

He said evidence also shows that SRC directors followed Najib’s instructions and acted in accordance with them.

“There is no evidence to show that the directors of SRC had disregarded or defied the appellant’s (Najib) instructions,” Justice Abdul Karim added.

In a unanimous decision on Wednesday, Court of Appeal Judges Abdul Karim, Datuk Has Zanah Mehat and Datuk Vazeer Alam Mydin Meera upheld the High Court's verdict on all seven charges against Najib in the SRC case.

Justice Abdul Karim said the Court of Appeal found no error in High Court Judge Mohd Nazlan Mohd Ghazali's decision in asking Najib to enter his defence when Mohd Nazlan said a prima facie case had been proven against Najib.

On July 28, 2020, the High Court sentenced Najib to 12 years in jail and fined him RM210 million after he was found guilty by Mohd Nazlan of seven charges involving SRC, which included one charge of abuse of power involving Retirement Fund (Incorporated)'s (KWAP) RM4 billion loans to SRC, three counts of criminal breach of trust involving RM42 million and three counts of money laundering.

Najib is also facing three money laundering charges involving RM27 million in SRC.

On Wednesday, Justice Abdul Karim said the Court of Appeal had also agreed with Mohd Nazlan’s contention that Najib had “total and complete dominion” over SRC's activities.
Justice Abdul Karim said evidence clearly shows the RM42 million in Najib’s bank account originated from SRC.

“The governance structure of SRC made the overarching control that the appellant (Najib) had over SRC possible.

"The ultimate shareholder of SRC is the Government of Malaysia, of which, the appellant was at the material time the executive head.

“In this unique corporate governance structure of SRC, it cannot be denied that the true control and ultimate power vested in the appellant (Najib) and no other.

"Thus, we (Court of Appeal) concur with the learned judge's (Mohd Nazlan) conclusion that the law would therefore consider the appellant to have been entrusted with full dominion over SRC including its property, even from its establishment,” Justice Abdul Karim said.

Justice Abdul Karim said the evidence in the case clearly records that the RM42 million, which originated from SRC's Amlslamic Bank Bhd bank account flowed through the bank accounts of Gandingan Mentari Sdn Bhd (GMSB) and Ihsan Perdana Sdn Bhd (IPSB) before being deposited into Najib’s bank account.

“The fact that the funds flowed through these intermediary companies does not necessarily mean that SRC no longer has a proprietary interest in these funds, nor does it mean that the funds do not belong to SRC.

"Evidence has established that the flow of these funds, i.e. the RM42 million, through the intermediary companies, namely GMSB and IPSB, was to layer the transaction and disguise the flow of funds such that it is made more difficult to track the funds' nexus to SRC and avoid detection by the authorities,” Justice Abdul Karim said. He said funds remain SRC’s despite flowing through these two companies and into Najib’s bank account.

According to Justice Abdul Karim, the evidence clearly shows that Najib misappropriated the RM42 million.

"The RM42 million, contrary to the appellant's assertion that he used it for corporate social responsibility programmes of the company (SRC), had been used for his personal benefit and for his political purposes,” Justice Abdul Karim said.

The Edge is covering the trial live here.

Users of The Edge Markets app may tap here to access the live report.

Edited ByChong Jin Hun
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