SRC’s loans from KWAP not used for intended purpose, High Court told

KUALA LUMPUR: The High Court here was told that a RM1.8bil loan taken out by SRC International Sdn Bhd from Retirement Fund Inc (KWAP) was never used for investments in the energy and resource sectors, a purpose it was intended for.

Angela Barkhouse, an offshore asset recovery specialist, testified that on Nov 3, 2011 Bank Negara Malaysia (BNM) had set out conditions regarding the use of the RM1.8bil, whereby the monies should only be utilised to acquire four entities: PT ABM Investama and Bumi Resources Tbk PT in Indonesia; and Gobi Coal and Energy Ltd and Erdens-Tavan Tolgoi in Mongolia.

“Some funds were invested in PT ABM Investama and Gobi Coal and Energy Ltd.

“However, the majority of the KWAP loans was (not used) to acquire the four entities listed in BNM’s first permission,” she said here on Monday (March 11).

ALSO READ: SRC was the victim of large-scale fraud, court told

An expert in financial investigation, Barkhouse is the second witness in the hearing of a lawsuit filed by SRC International against former prime minister Datuk Seri Najib Razak and former CEO Nik Faisal Ariff Kamil over allegations of breach of statutory duties.

Barkhouse was the liquidator for SRC BVI, a subsidiary of SRC International.

The Briton was testifying in the hearing through Zoom.

The witness also said BNM had given permission on April 6, 2012 for a second loan from KWAP, totalling RM2bil, to be used for investments in energy and natural resources industries, excluding oil and gas.

The funds were not invested in energy and natural resources, as set out in the bank’s second permission, she 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 benefitted 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, Datuk Shahrol Azral Ibrahim Halmi and Tan Sri Ismee Ismail in May 2021.

However, it removed six names from the suit later 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 general, exemplary and additional damages, interests, costs and other reliefs deemed fit by the court.

It also seeks a court declaration that Najib is responsible for the company’s losses due to his breach of duties and trusts, and a demand for Najib to pay back the RM42mil in losses that it suffered.