This article first appeared in The Edge Malaysia Weekly on December 16, 2019 - December 22, 2019

DURING former prime minister Datuk Seri Najib Razak’s defence in the High Court last week, he claimed that he did not micromanage companies that belong to Minister of Finance Incorporated by giving instructions to their board of directors and that SRC International Sdn Bhd was no exception.

However, following the cross-examination by Attorney-General Tan Sri Tommy Thomas, the events that transpired surrounding the dealings involving SRC might have suggested otherwise.

According to Najib, he was never in any position to micromanage SRC, even as he was holding the position of adviser emeritus. Instead, he blamed it on SRC CEO Nik Faisal Ariff Kamil for toying with both sides — Najib and the board of directors.

“To me, he said these matters were decided by the board of directors, and to the board of directors, he said I had directed the matter to be done in certain ways. But what I felt odd was why SRC directors, including [SRC’s former board of directors chairman Tan Sri Ismee Ismail], did not even bother to verify these matters with me directly and accepted Nik Faisal’s words all the way through,” he said as he read his witness statement.

Nik Faisal, like purported puppet master Low Taek Jho, better known as Jho Low, is still at large since he left the country two days before the 14th general election last year.

Previous testimony at the prosecution stage painted Nik Faisal as the sole link between SRC’s board of directors and the former premier. Former SRC chairman Ismee said that as members of SRC’s board of directors, they had complied with Najib’s instructions after being informed by Nik Faisal during a board meeting on Sept 13, 2011. The authenticity of the minutes of the meeting, however, is contended by Najib’s lawyers.

Nevertheless, Najib did verify a June 3, 2011, letter from Nik Faisal to him as finance minister — instead of Kumpulan Wang Persaraan (Diperbadankan) or KWAP — to obtain an initial RM3.95 billion loan. Najib agreed that it was his handwriting noting “Bersetuju” in the letter, but maintained that the decision to extend the loan still lies with KWAP’s investment panel on whether to approve or reject the loan application.

It is worth noting that members of KWAP’s investment panel were appointed by the finance minister, a portfolio held by Najib from 2008 until 2018. This was despite Thomas pointing out the KWAP investment paper to the board had initially recommended a RM1 billion cap while the minutes of the second meeting by the fund’s investment panel noted that its chairman, Tan Sri Wan Abdul Aziz Wan Abdullah, said Najib had told him that “RM2 billion was sufficient”.

In fact, Thomas said Najib was the sole reason why the RM2 billion loan was disbursed in an unusually speedy manner to SRC. Najib, however, disagreed with such a notion, saying the funds were disbursed quickly to ensure that SRC had adequate working capital for its operations, which he said was of national interest.

Najib was also credited with expediting the award of the government guarantee on the loan. However, according to him, the process to table the government guarantee for SRC’s RM2 billion loan to the Cabinet in 2011 was rushed because there was an investment opportunity waiting for the company. The whole approval process by the Cabinet was done in two days, as per the testimony by previous witnesses involved in the process.

It is noteworthy that Najib did not recuse himself from the Cabinet meeting on Aug 17, 2011, to discuss the government guarantee for SRC’s loan application, saying that he “totally disagreed” with the suggestion he was “hopelessly” in conflict of interest with the matter. But he admitted that the process was expedited under his orders.

Najib also admitted last week to former second finance minister Datuk Seri Ahmad Husni Hanadzlah’s claim that the former rejected his proposal to lead a delegation to Switzerland to resolve the issue of SRC’s funds in frozen bank accounts there. Some RM3 billion in the accounts — part of the total RM4 billion loan from KWAP — were frozen by Swiss authorities at the time on suspicion of being laundered funds.

Najib, however, nonchalantly brushed off the matter, saying that it was not a formal request. On top of that, he said it was not his responsibility anyway to retrieve those funds. The fact of the matter is, Najib, as adviser emeritus, finance minister and prime minister, had the power to “hire and fire” the members of the board of directors in SRC.

It may not be too far from the truth to say that the board’s decisions may have, to a certain extent, been influenced by Najib’s directions.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's AppStore and Androids' Google Play.