Thursday 28 Mar 2024
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This article first appeared in The Edge Malaysia Weekly on July 15, 2019 - July 21, 2019

DESPITE granting a significant RM4 billion in loans to SRC International Sdn Bhd and expediting disbursement at the request of former prime minister and finance minister Datuk Seri Najib Razak, it appears that no one from Kumpulan Wang Persaraan (Diperbadankan) (KWAP) or the Ministry of Finance (MoF) thought to follow up on the utilisation of the funds, awitness testimony last week revealed.

MoF and KWAP had been pushed to expedite the approval process for two loans of RM2 billion each, yet executives seem clueless as to what happened to the funds.

Former Treasury secretary-general Tan Sri Dr Wan Abdul Aziz Wan Abdullah, who was also the chairman of KWAP, told the court that he does not know what the money was used for, even though KWAP had initially agreed to only a RM1 billion loan as it was of the view that it was too risky to lend RM4 billion to a single entity for a single sector. However, because Najib pushed for a bigger amount, KWAP eventually lent SRC RM4 billion.

During re-examination by deputy public prosecutor Datuk Suhaimi Ibrahim, the 45th prosecution witness was asked if there was anything to show for SRC, considering the loans were given without following standard procedures, particularly as Wan Abdul Aziz agreed with the defence that SRC could have been “the next Petronas”.

Najib’s lead counsel, Tan Sri Muhammad Shafee Abdullah, pointed out during cross-examination that there had been occasions in the past, under previous prime ministers, when certain important projects were pushed through and the requisite paperwork only completed afterwards.

Using the same line of argument, Suhaimi asked Wan Abdul Aziz, “Firstly, the Delima Hotel (in Langkawi), which saw ... development commence before the paperwork was done. Although the project did not follow the standard procedures relating to the paperwork, was the project completed?”

“Yes,” said Wan Abdul Aziz.

“Similarly for UEM — is the highway there for us to use?”

“Yes,” he replied.

“And for SRC, after the loan was granted. Do you know what they did with the borrowed funds?”asked Suhaimi.

“No,” Wan Abdul Aziz replied.

He also concurred with defence lawyer Farhan Read’s suggestion that the government guarantee granted to SRC had provided comfort to KWAP as it was essentially “free money” for the retirement fund “in the sense that KWAP already makes a profit based on the interest on the loan and should a default happen, the government will step in”.

Wan Abdul Aziz said the government guarantee was a determining factor in the decision to grant the loans to SRC.

Farhan also suggested that the transfer of ownership of SRC to the Minister of Finance Inc  was seen as “a bonus” to KWAP, ostensibly because SRC would come directly under MoF Inc rather than be its indirect unit.

 

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