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

THE testimonies of three former senior officers of the Ministry of Finance (MoF) in the SRC International Sdn Bhd case last week provided considerable insight into the role played by former prime minister Datuk Seri Najib Razak in helping the company secure a RM4 billion loan from Kumpulan Wang Persaraan (Diperbadankan) (KWAP).

Najib, who was also the finance minister then, had an influence on the deal and the government guarantee on the loan, as evident from rules that were made less stringent for SRC. This was all the more telling given that at its inception, SRC was only a RM2 company.

Moreover, Najib was instrumental in ensuring that SRC, formerly a subsidiary of 1Malaysia Development Bhd (1MDB), be transferred or placed directly under Ministry of Finance Inc.

The witnesses — former MoF secretary Datuk Maliami Hamad, former Treasury deputy secretary-general Datuk Mat Noor Nawi and former Treasury secretary-general Tan Sri Wan Abdul Aziz Wan Abdullah — testified to the effect of Najib’s seemingly outsized involvement in the company at the Kuala Lumpur High Court last week.

Maliami, who was attached to the ministry’s management, loan, capital market and actuarial division, said his unit was pressured to prepare SRC’s memorandum, which was to be tabled to the Cabinet in support of the company’s request for a government guarantee for its first RM2 billion loan from KWAP. SRC had applied for the loan in August 2011.

And in relation to the second RM2 billion loan from KWAP, the 65-year-old witness said that in March 2012, Wan Abdul Aziz instructed him to request an early loan disbursement from KWAP even though the second government guarantee had yet to be issued.

It was the first time in his seven years of working for MoF that funds were disbursed by a lender before a government guarantee was formalised, he said during examination-in-chief by deputy public prosecutor Datuk Suhaimi Ibrahim.

The 43rd prosecution witness added that the way SRC was treated indicated a “top-down” approach — in other words, the instructions given to his superior, Wan Abdul Aziz, to prepare the government guarantees came from the “top people”, here referring to Najib — because he was told the guarantees had to be issued “regardless of the circumstances”.

Maliami said he, in turn, pressured his subordinate officer, Afidah Azwa Abdul Aziz, to prepare the Cabinet memorandum within the same day — Aug 15, 2011 — for approval by the minister in the Prime Minister’s Department, Tan Sri Nor Mohamed Yakcop, and its tabling to the Cabinet two days later.

Draft signed on car bonnet

The term “top-down” was also used by Mat Noor, who testified after Maliami.

Mat Noor said SRC had written directly to Najib for its ownership to be transferred from 1MDB to MoF Inc.

Mat Noor, 64, said a 1MDB officer by the name of Zahid Taib had informed him that Najib wanted to see a draft of the transfer of ownership.

After the document was drafted — but not on the ministry’s letterhead — Mat Noor delivered it to Najib, who was at the Subang Air Force Base to catch a flight. Najib read and signed the draft on the bonnet of his official car.

Mat Noor revealed that SRC’s transfer of ownership was unusual as it was decided from the top-down, whereas the normal bottom-to-top approach would require certain procedures to be followed.

He later photocopied the draft on a MoF letterhead “and put all the official (prime minister’s) stamps on it”.

Najib wanted KWAP loan to be increased to RM2 billion

Wan Abdul Aziz, who was also the chairman of KWAP, said he briefed Najib sometime in July or August 2011 that KWAP had agreed to a RM1 billion loan as it was uncomfortable at the “over-concentration” of the RM3.95 billion loan in a single industry.

“He told me to hasten the approval process of the SRC loan from KWAP, and said RM2 billion could be a sufficient figure — not RM1 billion. The meeting only involved the two of us,” he disclosed, following which he informed the then-KWAP CEO Datuk Azian Mohd Nor of Najib’s directive.

“Had I not had any communication with Najib regarding SRC’s KWAP loan, the KWAP investment panel would have maintained the loan at RM1 billion,” he said of SRC’s first loan from KWAP.

In regard to the second SRC loan of RM2 billion, he received a call from Najib to expedite the loan approval process to allow for an early disbursement, even though he acknowledged that it was unusual for KWAP to hand out such a sum before any government guarantee was issued.

Najib is facing three counts of criminal breach of trust, one for abuse of power and three for money laundering involving RM42 million of 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.

Hearing continues on Monday before judge Mohd Nazlan Mohd Ghazali.

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.