Shafee's opening statement in the defence case of Najib's SRC trial

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The following is Tan Sri Muhammad Shafee Abdullah's opening statement in the defence of Datuk Seri Najib Razak (DSN) in the SRC trial, reproduced in full.

 

A. INTRODUCTION

 

1. On 11.11.2019, this Honourable Court ordered DSN to enter his defence on all seven (7) charges in these proceedings based on oral grounds which were pronounced on that day (“Grounds”).

 

2. This is the opening statement of the defence made pursuant to Section 181(1) of the Criminal Procedure Code to the best of the ability of the defence given the underlying circumstances. Some of the matters we are raising below may be said to be matters appropriately to be raised at appellate levels. But that is not entirely true as this Honourable Court is still sitting over this matter and Your Lordship is empowered:

(i) To put right or offset any matters that may infringe the fair trial and due process;

(ii) This Honourable Court is empowered to revisit every findings of facts or law and to review the same. It is with these in mind, we endeavour to state the following as part of our opening statement of the Defence.

 

B. FAIR TRIAL AND DUE PROCESS

 

3. Following the prosecution closing its case on 27.8.2019, this Honourable Court fixed the continuation of trial for nine (9) days in December 2019 beginning 3.12.2019 to hear the defence case in the event the Court so ordered. Counsel had indicated that contingencies may arise which may necessitate an adjournment.

 

4. The grounds which make up the substantive findings of fact and inferences which DSN is now compelled to explain, rebut or raise reasonable doubt on what was pronounced on 11.11.2019. It was only from this date that adequate and effective preparation of the defence case could have been undertaken.

 

5. Given that DSN’s personal liberty is at stake, due process in accordance with fundamental liberties guaranteed in Article 5 of the Federal Constitution would have merited a reasonable period and opportunity being given to DSN to prepare for and mount an effective defence.

 

6. Established past practices of our Courts have in the past allowed several months for this given:-

(a) the seriousness of the offences which make up the Charges and the penal consequences thereof;

(b) the length of time that has elapsed since the events that are the subject matter of the Charges;

(c) the magnitude of the findings in the Grounds;

(d) DSN’s election to give sworn testimony;

(e) the number of offered witnesses (66 in total); and

(f) the necessity to identify and interview potential defence witnesses;

 

7. Nonetheless, there was only 21 days between the date the Grounds were pronounced and the scheduled start of the defence case this morning. With the greatest of respect, we would be failing in our duties to our client and as officers of this Honourable Court if we do not state that the resultant time has been inadequate to undertake all necessary action in order to prepare effectively for the defence case.

 

8. Further, out of these 21 days:-

1. between 11.11.2019 and 15.11.2019, counsel and solicitors were engaged in preparation of Criminal Application No. WA-44-290-11/2019 which was heard and dismissed on 15.11.2019;

2. the trial in KLHC Criminal Case No. WA-45-(11&12)-04/2019 (the PAC Case) proceeded on six (6) days whereby DSN was compelled to attend and instruct counsel.

 

9. What would have needed several months was effectively relegated to 11 clear days including the weekends where DSN was able to meet with his solicitors and counsel for the purposes of the defence case preparation.

 

10. Out of the 66 witnesses offered, despite the kind cooperation of the prosecution, given the exigencies of time, interviews could only be had with seven (7) out of the 66 witnesses offered by the prosecution.

 

11. It is also to be noted that:-

(a) the Prosecution continue to withhold the identity of 102 witnesses who had provided statements to the MACC during the course of the investigations which led to the Charges being preferred against DSN in the present proceedings. As a result defence has been deprived of the ability of interviewing these witnesses and electing whether or not to call any of these witnesses as defence witnesses in the defence case;

(b) the prosecution continue to withhold the investigation statements of witnesses who are on the prosecution’s own admission are untraceable, dead and/or cannot be found including the statement of Low Teik Jho @ Jho Low and Nik Faisal Ariff Kamil, who clearly have been involved in the material events.

 

12. Nonetheless and given the serious consequences to his liberty, DSN has used his best endeavours to prepare for the defence case in the circumstances. He shall today take the stand as the first defence witness.

 

13. Vis-à-vis the other defence witnesses, given the above, at this stage the defence is not able to ascertain with any degree of certainty which witnesses would be called as defence witnesses.

 

C. EVIDENCE ADDUCED IN THE PROSECUTION’S CASE

 

14. We now outline matters which have been reflected in the evidence that has already been adduced during the prosecution’s case on which the defence shall rely on.

 

15. At all times, the clear impetus behind KWAP and the Government of Malaysia’s endorsement of the intended activities of SRC and the need for SRC to be adequately funded through the KWAP loans and secured by the Government Guarantees was based on the intended activities of SRC promulgating national key development areas identified in the 10th Malaysia Plan and the New Energy Policy. This was the justification that underscored the decisions of the EPU, KWAP, the Ministry of Finance and the Cabinet from the time the EPU approved of the setting up of SRC up to the time the Cabinet approved the second Government Guarantee on 8.2.2012 and the Ministry of Finance’s request for and KWAP’s approval on further RM2bn loan to be disbursed to SRC.

 

16. To say otherwise would be to unreasonably imply and infer that the relevant decision makers including the Head of the Treasury, relevant Ministers, members of the Investment Panel of KWAP and members of the Cabinet had committed a dereliction of their public, statutory and/or constitutional duties.

 

17. The decision to bring SRC directly under the Minister of Finance Incorporated (MKD) was approved by DSN after due deliberations had taken place between the EPU Minister and the Ministry of Finance and was based on the recommendations of the BMKD, the very department which oversees the affairs of MKD. The added supervision of SRC by the BMKD was envisaged as being in the best interest of MKD and the Government of Malaysia. The same also was endorsed by the Cabinet as one of the basis for granting the 2nd Government Guarantee on 8.2.2012

 

18. DSN at all times had no personal interest in SRC which can be said to be conflicted with his public duty. There is no question of DSN having a personal interest herein. The acts and involvement of DSN in matters concerning SRC led to matters which were endorsed or ultimately approved by KWAP, the EPU Minister, the Ministry of Finance, the Treasury and/or the Cabinet. These acts of DSN were motivated only by the best interests of the Government and Malaysia.

 

19. The contemporaneous evidence borne by the documents and oral testimony reveals that at all times DSN intended for the Ministry of Finance to supervise the affairs of SRC. There is no evidence to suggest that the BMKD were prohibited from doing so. In fact, the evidence suggests that the officers of the BMKD and the Minister of Finance 2 were involved in key decisions involving SRC and were well aware of the affairs of SRC including how the RM4bn loaned to SRC was reported to have been utlised.

 

20. Reliance on selective provisions of the M&A of SRC (P15) to suggest that DSN was unilaterally empowered to direct and control the Board of Directors of SRC on all matters is unsupported by a clear reading of those very provisions and ignores that the M&A conversely expressly provided for the management and determination of all investment and policies to be decided exclusively with the Board.

 

21. The testimony of Dato Ismee (SP39) and Dato Suboh (SP42) vis-à-vis any instructions of directions they received from DSN was based on inadmissible hearsay evidence and do not amount to any proof. Their testimony was in any event incredible given that the contemporaneous documentary evidence on the corporate governance regime of SRC and the records of the deliberations and key decisions of the Board of Directors reflects that the Board did indeed act as the ultimate decision making body in SRC and were not adhering to instructions or directions of any third person.

 

22. To suggest that the Board of Directors consisting of such highly qualified and experienced individuals were unaware of their statutory and legal duties to act in the best interest of the company and instead unquestioningly acted on the say so of Nik Faisal Ariff Kamil and/or based on purported resolutions of a shareholder on matters which only the Board of Directors could have and should have decided on defies logic and reeks of self-serving after thoughts, inspired by their own selfpreservation.

 

23. The purported MKD Minutes of 1MDB (P530 and P497) were inadmissible and/or were not properly proven in evidence. The contents appeared to be inconsistent with one another. The dating of these documents and its provenance was never credibly established by the evidence. In any event the existence of these MKD Minutes of 1MDB are inconsistent with the bulk of the other contemporaneous evidence concerning the affairs of SRC and the corporate governance regime which were applicable at that time and well understood by the Board of Directors of SRC.

 

24. The purported MKD Minutes of SRC dated 17.2.2012 (P385, P501, D534 and D535) were inadmissible and/or unproven The contents appeared to be inconsistent with one another. The dating of these documents and its provenance was never credibly established by the evidence. The testimony that these Minutes preceded a Directors Circular Resolution (P385) was incredible noting the past and future practices of the Board of Directors of SRC and noting the usual corporate governance regime which SRC was adhering to as evidences by the contemporaneous records.

 

25. The decision for funds of SRC to be transferred overseas was made by the Board. The same were ultimately reported to KWAP and the Ministry of Finance. In any event, the justification for the same was based on matters the Board had endorsed and approved in the best interest of the company. It was incredible to believe that the highly qualified and experienced Board members held any contrary view vis-àvis matters which required the Board to decide on in their own discretion. It was also incredible to believe that the Board accepted the say so of the CEO of SRC without verification.

 

26. There was no basis to suggest that the amendments made to the M&A of SRC in April 2012 were sinister. The testimony that the matter originated from the shareholder of SRC was incredible and inconsistent with the contents of the documents itself (P510) noting the contents of the Directors Circular Resolution carrying the requisition for an EGM to approve the proposed amendments (P511).

 

27. In any event the ambit of Article 117 on the role of the Advisor Emeritus did not support the view that the same was designed or used as a means to control the Board. The alleged instructions represented by the CEO were not supported by the contemporaneous records of SRC including the Board Meeting Minutes which reflected that all material decisions relating to the affairs of SRC were made by the Board of SRC or the Board of its subsidiaries.

 

28. There was no credible evidence as to how funds of SRC were in fact utlised. The allegation that the utilisation of the funds of SRC by transfers overseas was inconsistent with the purposes outlined by KWAP or by Cabinet is unfounded given the earlier decisions of the Board of Directors on the issue of mitigating negative costs and the eventual matters reported to the Board of Directors and the Ministry of Finance vis-à-vis how the RM4bn was utlised.

 

29. There is no credible evidence which conclusively proves the cause of disbursement of funds from the account of SRC eventually to IPSB on 24.12.2014, 5.2.2015 and 6.2.2015. Critically Dato Suboh had testified that his signature on the six (6) Rentas Forms used to carry out these transactions was forged. The prosecution themselves took the position that Nik Faisal’s signatures on the same were also ‘cut and paste’ and forged. The same is true for the other 11 Rentas Form adduced in evidence. Collectively these Rentas Forms were used to transact over RM290 million from the account of SRC. The Honourable Court would be invited to cast its mind far and wide as to why these forgeries had taken place in SRC. Surely, DSN could not be responsible for these! Who could he really responsible may in fact provide serious answers, subject matters of this trial.

 

30. The allegation that DSN had knowledge of and/or was involved in the material transactions of RM42million from the accounts of SRC to GMSB to IPSB and eventually into the 880 and 906 Accounts flies in the face of other contemporaneous documentary records and evidence which in fact revealed that these and other transactions were done at the behest of third parties for their own ulterior benefit and interests.

 

31. The testimony of Ung Su Ling (PW49) which suggested that Dato Azlin bin Alias had given her instructions was not credible and her explanations in cross examination were illogical and were clearly untrue. The unchallenged contemporaneous records revealed that Ung Su Ling was clearly acting under instructions of Jho Low.

 

32. As a whole the evidence with regards to the manner in which cheques were issued from the DSN accounts versus the actual balances of the accounts leans in favour of a clear inference that DSN was not being accurately told of the real balances in the accounts. The same is fortified by the other contemporaneous evidence which revealed that there was a scheme in place to ensure that DSN was unaware of the actual transactions in his accounts.

 

33. The evidence as a whole does not support the inference that the RM42million was gratification which DSN was paid either by himself or through any other party as part of a corrupt arrangement. The evidence in fact reflects that there was no nexus between any of the acts of DSN vis-à-vis SRC in 2011 and 2012 and the transfer of these funds into his accounts in 2014 and 2015. The impetus and cause of the transactions in 2014 and 2015 reflected in the contemporaneous records in evidence also does not support any such nexus or the existence of a single continuous plot or scheme by DSN.

 

34. DSN did not lodge a police report or raise complaints vis-à-vis the transactions in his accounts given that the subject matter was already by that stage being investigated by the authorities and DSN chose instead to respect the process and integrity on the then on-going investigations. This very reason was contemporaneously recorded in the Reply filed on behalf of DSN in the civil suit he brought against Tun Ling Leong Sik (D661) which was filed on 12.1.2016. Ultimately the findings of the then Attorney General on the matter was published in 2016 and given the same no further action was required.

 

35. From the admissions of the Investigating Officer, from the total usage of the funds by way of the cheques and credit cards adduced in evidence was consistent with the accounts being opened for CSR purposes and not for personal enrichment. 98% of the funds utilised vide these cheques were for CSR. 1.5% was used for a gift to a foreign dignatory and only 0.5% was used for other purposes. Our client shall confirm this stunning fact which we shall invite this Honourable Court to infer whether such spending, which never benefitted him personally but a cross section of the public at large, is the action of a criminal in the predicate or AMLA offences?

 

36. The bulk of the evidence as a whole supports the inference that DSN had no knowledge of or reasonable suspicion to believe that there were proceeds of any illegal activity transacted into his accounts. DSN also had reasonable basis to rely on the information provided to him vis-à-vis the provenance of funds in his account noting the surrounding circumstances that existed since 2011 to 2015.

 

37. With the greatest of respect, the defence will pray that this Honourable Court revisits and reviews (as the Court is empowered to undertake) the substantive findings of fact and inferences drawn by this Honourable Court in the Grounds at the end of the defence case.

 

D. DEFENCE CASE

 

38. The evidence of DSN will touch on:-

(a) The events which led to 1MDB being set up and approved by Cabinet including Cabinet’s acquiescence to identity of directors and the powers which were to be provided to DSN to approve of the appointments or removals of directors in 1MDB;

(b) The intended involvement of SRC in matters relating to key national development areas identified by the EPU in the 10th Malaysia Plan and the New Energy Policy formed the basis and impetus of DSN’s involvement in:-

(i) the Government’s endorsement to the setting up of SRC;
(ii) support for KWAP to provide the loans to SRC;
(iii) the decision to bring SRC under MKD directly;
(i) the provision of the Government Guarantees;
(ii) the request for early disbursement of the 2nd loan;

(c) Vis-a-vis the above matters DSN had at all times acted in his public capacity for and on behalf of the best interests of the Government of Malaysia and not for any personal interests;

(d) Vis – vis the affairs and operations of SRC, DSN did not control or direct the Board of Directors on any matter which was within the purview of the Board of Directors of SRC. Matters concerning SRC were left in the hands of the competent, extremely qualified and experienced members of the Board of Directors of SRC to decide on in the best interest of the Company. 

(e) DSN had never directed the Board through Nik Faisal and the limited briefings he received by Nik Faisal provided DSN only with a general outline of the affairs and initiatives of SRC which was represented as having been directed by the Board of SRC. Correspondences received by DSN from SRC gave the impression that the contents thereof had been endorsed by the Board of SRC prior to the same being sent to DSN for his views or comments;

(f) The existence of the Minutes/Resolutions of MKD of 1MDB and SRC (P530, P497, P385, P501, D534 and D535) are questionable in the circumstances. These documents are not the type of documents DSN would sign on behalf of MKD unless the same were recommended by the BMKD;

(g) The loans and standby credit from the Government to SRC in 2015, 2016 and 2017 were approved by Cabinet and/or Treasury and/or the Minister of Finance due to the circumstances at the time and based on assurances of SRC that the same would be repaid back. The ultimate purpose was to avoid the Government Guarantees from being called on which would have impacted the Government and Malaysia adversely.

(h) DSN had no knowledge of and no involvement in the matters which resulted in the following transactions:-

(i) funds amounting to RM40 million disbursed out of the account of SRC to GMSB and thereafter to IPSB on 24.12.2014;
(ii) funds transfers of RM27 million and RM5 million from IPSB to the 880 and 906 accounts respectively on 26.12.2014;
(iii) fund transfers of RM27 million and RM5 million from the 880 and 906 accounts to the accounts of PBSB and PPC on 29.12.2014;
(iv) funds amounting to RM10 million disbursed out of the account of SRC to GMSB and thereafter to IPSB on 5.2.2015 and 6.2.2015; and
(v) funds transfers of RM10 million from IPSB to the 880 account on 10.2.2015;

(i) The surrounding circumstances and material events led DSN to believe that Jho Low was a close associate of the royal family of Saudi Arabia and that monies he received from 2011 to 2014 were in fact donations from King Abdullah in pursuance to assurances DSN had received from King Abdullah himself;

(j) Throughout the period from 2011 to 2015, DSN was of the understanding that matters relating to the opening of his CSR accounts, the remittances into the accounts and supporting documents for the same had been duly reported to Bank Negara Malaysia and Tan Sri Zeti Akhtar Aziz and this fortified his belief that nothing sinister was taking place;

(k) under the circumstances existing at the material time, DSN reasonably held a bona fide honest belief that all monies remitted into the accounts from 2011 to 2015 originated from parties who:-

(i) had divested ownership thereof absolutely and
(ii) had entitled DSN to utilise or deal with the same as he deemed fit.

(l) DSN’s utilisation of the funds from the accounts by way of cheques from 2011 to 2015 were almost all for CSR related matters to promote political, social, charitable causes and community related projects. Quite apart from this, the Credit Cards were charged for gifts to foreign dignitaries and some personal expenses. The amount utilised for personal matters was minimal and in any event was done in the belief that the monies could be utilised by him as he deemed fit;

(m) DSN therefore never intended to wrongfully gain or enrich himself with any of those funds and never intended to cause wrongful harm to any party;

(n) DSN was being misrepresented on about the transactions and actual balances in his accounts in 2013 to 2015 and his accounts were being manipulated by third parties without his knowledge and approval;

(o) DSN was not involved in any corrupt arrangement involving funds of SRC and did not solicit any bribes from any person. The RM42million transferred into his account was done without his knowledge or involvement and was not a form of gratification related to any act of DSN vis-à-vis SRC.

 

39. The Defence will also endeavour to lead other evidence on:-

(a) the secretarial documents and records of SRC;

(b) the meeting between DSN and King Abdullah ibn Abdul Aziz Al-Saud at the material time;

(c) other matters in fortification of the defence case.

 

40. The defence will ultimately submit that the evidence as a whole will establish:-

(a) that Section 23(4) MACCA applies given that DSN acted in pursuance with the best interest of the Government of Malaysia vis-à-vis matters involving SRC;

(b) that there was no misuse of office by DSN;

(c) that there was no corrupt arrangement under which gratification was offered, solicited or caused to be received by DSN;

(d) that DSN had no interest in SRC within the ambit and mischief of S. 23 MACCA and his involvement in matters concerning SRC as identified in the grounds on 11.11.2019 were not motivated by and corrupt motive;

(e) the statutory presumption in Section 23(2) MACCA which this Honourable Court applied has been rebutted on a balance of probabilities based on the evidence as a whole;

(f) that DSN was never an ‘agent’ or ‘director’ of SRC within the meaning attributed thereto in S. 402A read together with S. 409 Penal Code;

(g) DSN was not in control of SRC and was certainly not entrusted with dominion over funds of SRC either directly of indirectly;

(h) DSN did not misappropriate funds of SRC either directly or indirectly;

(i) DSN did not act dishonestly within the meaning of S. 24 Penal Code;

(j) the RM42 million was not received by DSN as alleged in the AMLA Charges;

(k) the prosecution have failed to establish the predicate offences which make up the illegal activity it is said the RM42 million is derived from;

(l) the objective circumstances justify that there was reasonable excuse for DSN to believe that the funds in his account were not the proceeds of illegal activity; and

(m) the evidence as a whole supports inferences favourable to DSN which this Honourable Court should prefer over any other inference to the contrary.

(n) reasonable doubt in relation to the ingredients of the offences which make up the seven (7) charges.

 

41. Ultimately we will pray for an Order that DSN be acquitted and discharged of all seven (7) Charges as the same would be merited given the above.

 

Dated this 3rd day of December 2019

MESSRS SHAFEE & CO.

 

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