Najib had absolute power in SRC, High Court hears

KUALA LUMPUR: Former prime minister Datuk Seri Najib Razak wields absolute power in decision-making when it comes to SRC International Sdn Bhd, including the utilisation and disbursement of a RM4bil loan from the Retirement Fund Inc (KWAP), the High Court heard on Tuesday (March 26).

Datuk Shahrol Azral Ibrahim Halmi, a former director of SRC, stated that he had no power to determine the direction, control or make decisions for SRC, which is a subsidiary of 1Malaysia Development Bhd.

However, he said that he was obliged under the law and by practice to comply with and implement Najib’s decisions and instructions regarding the company.

“Najib has absolute power to make all decisions pertaining to the direction, business, administration, and operations of the plaintiff (SRC), including how the RM4bil fund from the KWAP loan will be utilised and disbursed,” he said.

Shahrol Azral said this in his written witness statement at the hearing of a lawsuit by SRC against Najib and its former CEO Nik Faisal Ariff Kamil for breach of statutory duties before Justice Ahmad Fairuz Zainol Abidin.

He is one of the individuals listed as a third-party respondent in the lawsuit.

In his statement, Shahrol Azral denied making the decision for SRC to apply for the RM4bil loan from KWAP and how it was disbursed.

“All the important decisions involving such a colossal sum of money, the RM4bil KWAP loan, were made by Najib.

“As a mere director and just one of the many directors of the board, I do not have the power to make any decision with respect to the said RM4bil loan from KWAP,” he added.

According to Shahrol Azral, KWAP was a statutory body established under the Retirement Fund Act 2007 and is required to report directly to the Finance Minister, who was Najib at the time.

“He was the person who approved or caused SRC’s application for a KWAP loan to be approved either by himself or via his instructions to KWAP’s investment panel,” he said.

Under new management, SRC filed the legal action in May 2021, alleging that Najib had committed breach of trust, abuse of power, misappropriated the company’s funds and personally benefited from it.

It named Najib along with its former directors Datuk Suboh Md Yassin, Datuk Mohammed Azhar Osman Khairuddin, Nik Faisal Ariff Kamil, Datuk Che Abdullah @ Rashidi Che Omar, Shahrol Azral and Tan Sri Ismee Ismail in May 2021.

However, later, it removed six names from the suit and retained Najib and Nik Faisal as the first and second defendants.

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

Najib was SRC’s Emeritus Advisor from May 1, 2012, until March 4, 2019.

The company is seeking damages, interests, costs and a court declaration that Najib is responsible for the company’s losses due to his breach of duties and trust, and is demanding that Najib pay back the US$1.18bil in losses that it has suffered.

It is also seeking US$120mil and US$2mil from Najib and Nik Faisal, respectively, on account of fraudulent breach of fiduciary duties and breach of trust.

Najib has been serving a jail sentence at the Kajang Prison since Aug 23, 2022, after being convicted of misappropriating RM42mil in SRC International funds.

After he filed a petition for a royal pardon on Sept 2, 2022, his jail term was reduced from 12 years to six years, and the fine was reduced to RM50mil from RM210mil.

The hearing continues before Justice Ahmad Fairuz on Wednesday (March 27).