KUALA LUMPUR: Prime Minister Datuk Seri Najib Razak has been urged to order SRC International Sdn Bhd, a wholly-owned unit of the Ministry of Finance, to return the RM4 billion it borrowed from Kumpulan Wang Persaraan (Diperbadankan) (KWAP) to purchase a mining company in Mongolia.

PKR secretary-general Rafizi Ramli said SRC, a company that was “demerged” from the government-linked strategic development fund 1Malaysia Development Bhd (1MDB) three years ago, had made losses of RM164.35 million with zero revenue registered, according to its financial statement for the financial year ended March 2014.

“This means that the businesses of this company have not generated any income despite it having a RM4 billion loan which was borrowed from KWAP,” he told a press conference at the parliament lobby yesterday.

Rafizi, the Pandan Member of Parliament (MP), said SRC’s situation is akin to the modus operandi of other organisations that are linked to 1MDB, which is to borrow huge amounts of funds with a guarantee from the government without stable business activities.

“Najib should now order SRC to return every single sen of the RM4 billion that was borrowed from KWAP, in the interests of civil servants,” he said. 

Rafizi had previously said he was in discussions with lawyers, including Sepang MP Hanipa Maidin, to initiate a lawsuit against KWAP for approving the loan.

The “careless investment”, he said, was done without due diligence which puts pensioners’ interests at risk.

“We will proceed with legal action in court against those involved to protect the interests of pensioners and civil servants.

“I am sure there will be a lot of civil servants, among them MPs, who will be willing to file suit,” he said about two weeks ago.

1MDB has come under fire from Rafizi and other opposition politicians as well as former prime minister Tun Dr Mahathir Mohamad over its heavy debts, its use of money and its opaque operations.

There were concerns about the firm’s debts estimated at some RM42 billion, just five years into its operations, amid a softening of the ringgit against the US dollar. — The Malaysian Insider

This article first appeared in The Edge Financial Daily, on March 25, 2015.