KUALA LUMPUR (June 13): The SRC International Sdn Bhd trial was adjourned this afternoon, as the defence sought time to study the transcript of the company’s former chairman Tan Sri Ismee Ismail’s oral evidence for possible contradictions with his witness statement.

During cross examination, defence counsel Harvinderjit Singh, in a bid to prove former Prime Minister Datuk Seri Najib Razak is not linked to decisions made by SRC International, referred Ismee to his six-page witness statement.

In the statement, Ismee told the Malaysian Anti-Corruption Commission (MACC) that the SRC board of directors will give their approval to any matters brought to them for discussion by the special purpose vehicle (SPV) chief executive officer Nik Faisal Ariff Kamil, who is responsible for the company’s daily operations.

“SRC’s board of directors will act under the advice of the prime minister, as SRC’s advisor emeritus,” Ismee said in the witness statement.

However, Harvinderjit pointed out that this contradicts with Ismee’s oral evidence in court that SRC’s board acts according to the SPV’s shareholder resolution. Ismee has been  testifying in the High Court since Monday (June 10).

“In paragraph 9 of your witness statement, there is no mention that SRC board of directors will act upon the shareholder resolution, you agree,” Harvinderjit asked, to which Ismee agreed.

“The prime minister was never the shareholder of SRC, you agree,” the lawyer asked, to which Ismee agreed as well.

“I put it to you that what you have in your witness statement, does not cover what you have told the court, because there is no mention that the SRC board has to act upon its shareholder resolution,” said Harvinderjit.

However, Ismee disagreed and said he did mention to the MACC that the SRC board has to act according to the SPV shareholder resolution.

Harvinderjit then turned to Tan Sri Shafee Abdullah, who is the lead defence counsel, for further instruction.

“He disagreed,” he told Shafee, before making a request to Justice Mohd Nazlan Mohd Ghazali for a five-minute break.

Both prosecution and defence lawyers went into the chamber during the break, and the trial resumed with Shafee filing an application for adjournment for the defence to study the witness’ oral evidence transcript.

Appointed deputy public prosecutor Datuk V Sithambaram  supported Shafee’s request for an adjournment until 9am tomorrow, before deciding on the next course of action.

Earlier this morning, Harvinderjit was going through with Ismee on the SRC board’s decisions during the witness’ tenure as chairman.

The lawyer asked Ismee whether a shareholder resolution was required on the decisions, to which the witness said in some cases, such as fund transfer to overseas, there was a need for SRC shareholders’ approval, while for other matters, like administrative matters and treasury management, the  shareholder resolution is not required.

This came after Ismee was asked about the decision-making process within the SRC board, when he stated Najib was his ‘ultimate boss’ in his tenure as the SPV’s chairman.

“You have to understand how 1MDB works, I was also the CEO of Tabung Haji, so he (Najib) was my ultimate boss,” he said.

Nevertheless, Ismee insisted that the fiduciary duty of the board back then, was still the interest of the country and its citizens.

Ismee agreed with Harvinderjit that the SRC board needed to follow not only instructions from its shareholder 1MDB, but also instructions from 1MDB’s shareholder, MoF Inc.

However, Ismee said the SRC board could still make its own decision, if an instruction from the shareholder was “not right”.

“When we were instructed to transfer money to an account, we didn’t see anything ‘not right’. At that point in time, there is no reason to doubt these instructions,” Ismee said.

Harvinderjit also cited SRC’s Sept 13, 2011 board meeting minutes and its appendix, and a director’s circular, and suggested there was no shareholders involvement in approving RM1.8 billion of loan funds from KWAP to be transferred offshore.

However, Ismee said the fund transfer was done according to a shareholder resolution, but he could not recall where the resolution was today.