This article first appeared in The Edge Malaysia Weekly on December 30, 2019 - January 5, 2020

THE first of Datuk Seri Najib Razak’s trials involves transactions of RM42 million of alleged SRC International Sdn Bhd funds, all done within the country. This case is unlike the 1MDB-Tanore trial where the transactions or deposits took place outside the country.

A total of 57 prosecution witnesses testified in the trial in which the Pekan MP and former prime minister was ordered by the High Court to enter his defence on Nov 11.

The former Umno president and Barisan Nasional chairman is facing three charges of criminal breach of trust (CBT), one charge of abuse of power and three money laundering charges.

He is facing an abuse of power charge under Section 23 of the Malaysian Anti-Corruption Commission Act 2009 for using his position as prime minister and finance minister to commit bribery involving the RM42 million in the decision to provide government guarantees for RM4 billion in SRC loans from Retirement Fund Inc (Kumpulan Wang Persaraan (Diperbadankan) or KWAP).

Najib is alleged to have committed the offence at the Prime Minister’s Office in Putrajaya between Aug 17, 2011, and Feb 8, 2012.

He is also facing three CBT charges as PM and finance minister and adviser emeritus to SRC, and in those capacities, entrusted with the control of funds belonging to SRC totalling RM4 billion, having committed CBT to the sum of RM27 million, RM5 million and RM10 million. All three offences under Section 409 of the Penal Code were allegedly carried out between Dec 24, 2014, and Feb 10, 2015 at AmBank Jalan Raja Chulan.

Najib also faces three money-laundering charges where he is alleged to have received RM27 million, RM5 million and RM10 million respectively, which were proceeds from unlawful activities, via Real Time Electronic Transfer of Funds and Securities (Rentas), into two AmIslamic Bank Bhd accounts, bearing the numbers 2112022011880 and 2112022011906, at AmBank Group Building, 55 Jalan Raja Chulan, Kuala Lumpur between Dec 26, 2014, and Feb 10, 2015.

Damning testimonies

Some of the important witnesses who testified for the prosecution included former AmBank relationship manager Joanna Yu Ging Ping, former KWAP CEO Datuk Nor Azian Mohd Noh, former SRC board of directors chairman Tan Sri Ismee Ismail and former SRC director Datuk Suboh Md Yassin.

Among the incriminating testimony against Najib was Nor Azian describing the former premier as her “ultimate boss”. She said there was a need to comply with a note written by Najib on SRC’s letter to him, from former managing director Nik Faisal Ariff Kamil, requesting a RM3.95 billion loan from KWAP, despite it not being seen as pressure.

KWAP had wanted to offer a RM1 billion loan initially, but Najib had told then KWAP chairman Tan Sri Wan Abdul Aziz Wan Abdullah that RM2 billion would be sufficient.

As for Ismee, he told the court that the insertion of Article 117 in the SRC memorandum and articles of association in April 2012 granted Najib total control of SRC, besides his powers as the then PM to “hire and fire” the directors.

For Suboh, he said while he may have some questions on putting down signatures in the issuance of transfer of funds, he believed Nik Faisal’s directive as former SRC MD as “being emboldened with the mountain behind him”, the mountain here referring to Najib.

Nazlan’s decision to call Najib’s defence

Justice Mohd Nazlan Mohd Ghazali, in ordering the former premier to enter his defence, described Najib as showing a personal interest in SRC that was beyond the public position he held.

Viewed in totality, SRC cannot be construed as purely being a lawful exercise of Najib’s official duty as prime minister, finance minister or adviser emeritus of SRC, the judge said.

“This is because such conduct and involvement was beyond the ordinary, and outside the usual conduct or involvement expected of a prime minister and finance minister, similarly circumstanced.

“Such conduct and involvement exhibited by the accused instead serves only to demonstrate the existence of private and personal interest on the part of the accused in SRC, which interest, in my judgement, is in the nature that is envisaged under the law to fall within the ambit of Section 23 of the MACC Act,” Justice Mohd Nazlan said in ruling that a case had been built by the prosecution against Najib, and that he had to answer to the charges.

Bare denials and claims signatures were forged

While the former premier took the stand in his defence for three days, he denied having knowledge of the transfer of funds from SRC to his account, and refuted the fact that there was a conflict in his participation for the government guarantee issued in the RM4 billion loan from KWAP to SRC.

Najib further denied giving Jho Low the right to manage his accounts. The Pekan MP has filed a suit against AmBank Islamic Bhd, AMMB Holdings Bhd and Yu for disclosing his accounts to others and negligently allowing others not given the mandate to manage it.

He even disputed some of his purported signatures on the documents tendered by the prosecution and defence, and applied to call for a foreign handwriting expert to verify them.

The Pekan MP, in his cross-examination, however, initially agreed that his signature was on the amendment to the SRC memorandum of articles to insert Article 117, which gives him virtual control of the company. But when shown his witness statement, he maintained that he was unsure whether he signed it and is calling for the presence of an expert witness.

Attorney General Tan Sri Tommy Thomas showed that the second guarantee was approved before SRC applied for the second loan in 2012, and even asked Najib why he did not move for the frozen money in 2011 to be returned. Najib replied that it should have been SRC’s task and not his. He maintained the same reply when told that Finance Minister II Datuk Ahmad Husni Hanadzlah offered his help.

His cross-examination will continue on Jan 6.

IPIC

A trial involving Najib that is expected to begin in March at the earliest is the International Petroleum Investment Corp (IPIC) case, which had to make way for the SRC trial.

Najib and former Treasury secretary-general Tan Sri Mohd Irwan Serigar had claimed trial on Oct 25, 2018, to six counts of misappropriating some RM6.64 billion in government funds. The offences were allegedly committed between Dec 21, 2016, and Dec 18, 2017.

Part of the funds had been slated for certain purposes, including subsidy and cash assistance, reportedly under Budget 2017 allocations. The monies from that allocation were channelled into 1Malaysia Development Bhd instead to pay its debts, including US$1.2 billion to Abu Dhabi-based IPIC.

Justice Mohd Nazlan had initially fixed dates in January, February, March and April for the trial dates but in December, decided to give priority to the SRC case. Thus, the IPIC trial is only likely to start in March.

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