In SRC’s US$1.1b suit against Najib, ex-director admits ‘afterthought’ view of Najib blaming him and board for RM3.6b loss his own perception

KUALA LUMPUR, May 9 ― A former SRC International Sdn Bhd director today admitted it was his own perception that it was an “afterthought” on Datuk Seri Najib Razak’s part that led him to conclude the former prime minister held the entire board of directors responsible for damages suffered by SRC International relating to the approval of sham investments totalling RM3.6 billion.

Datuk Che Abdullah @ Rashidi Che Omar was testifying as a third party in SRC International Sdn Bhd’s US$1.18 billion (RM5.5 billion) civil suit against Najib in the Commercial High Court here.

Under cross-examination, Che Abdullah was asked by Najib’s lawyer Muhammad Farhan Muhammad Shafee to clarify why he believed that Najib’s allegation against him and the entire SRC International board of directors was an “afterthought” as stated earlier in his witness statement.

Najib, who was both prime minister and finance minister at the time, was SRC International’s sole and exclusive shareholder by way of Minister of Finance (Incorporated) under the Finance Ministry.

Advertisement

Che Abdullah then agreed with Muhammad Farhan’s suggestion there was no evidence to suggest the oversight by former executive director Nik Faisal Ariff Kamil to not withdraw the RM3.6 billion that the company had transferred to its overseas entity ― SRC International (Malaysia) Limited (SRC BVI) ― was at the direction of its shareholder at the time.

He also agreed with Muhammad Farhan that his “afterthought” view of Najib’s allegation over damages suffered by SRC International relating to the transfer of RM3.6 billion to SRC BVI was due to his director’s position in approving the investment was more of his own interpretation.

“So you confirm that this allegation of ‘afterthought’ is more of a perception than anything tangible?” Muhammad Farhan asked.

Advertisement

“Yes, yes,” Che Abdullah replied.

As to the source of the aforementioned RM3.6 billion, it originated from a loan of RM4 billion which SRC International obtained from the Retirement Fund Incorporated (KWAP) — a statutory body which manages the pension scheme for Malaysia’s civil servants.

Evidence before the court showed that the funds were transferred out of SRC BVI into various fraudulent intermediaries between December 2011 and April 2014. However, none of the RM3.6 billion transferred out appeared to have been used to ensure the long-term supply of energy and natural resources for which the company was established, a previous witness told the same court.

In the same cross-examination, Che Abdullah also said Nik Faisal had assured the board that the purported RM3.6 billion investment funds could be withdrawn at any time.

Yet, he said Nik Faisal’s failure to do so frustrated the members of the board including himself.

The hearing before Commercial High Court judge Datuk Ahmad Fairuz Zainol Abidin resumes May 20.

Imprisoned since August 23, 2022, Najib is serving his 12-year jail sentence and RM210 million fine for his conviction over the misappropriation of SRC International’s RM42 million funds, which has recently been reduced to six years of jail and RM50 million fine by the Pardons Board.

SRC, under its new management, had filed legal action against Najib and its former directors Datuk Suboh Md Yassin, Datuk Mohammed Azhar Osman Khairuddin, Nik Faisal, Che Abdullah, Datuk Shahrol Azral Ibrahim Halmi and Tan Sri Ismee Ismail in May 2021.

However, later, it removed six names from the suit and retained Najib as the defendant.

Additionally, Najib has brought the former named SRC International directors as third-party respondents.

SRC as a plaintiff in the writ of summons had alleged that Najib had abused his power and obtained personal benefits from SRC International’s funds as well as misappropriated the funds. Najib was SRC’s Emeritus Adviser from May 1, 2012, until March 4, 2019.

SRC International, which is now wholly owned by the Ministry of Finance Incorporated (MoF Inc), is seeking general damages, exemplary, additional interest, costs and other appropriate relief provided by the court.

SRC International is currently seeking a declaration from the court that Naijib is liable to account for the company’s losses due to his breach of duties and trust.

The company is also seeking an order that Najib pay the US$1.18 billion in losses it suffered, and damages for breach of duties and trust; including an order that Najib compensate the sum of US$120 million as well.