Src Suit Baffling Why Board Members Didn T Verify With Me Najib

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Former SRC International adviser emeritus Najib Abdul Razak wondered why board members did not directly verify with him over matters pertaining to the Minister of Finance Incorporated (MOF Inc) company.
The former premier testified before the Kuala Lumpur High Court this morning to rubbish SRC's contention that he had a hand in the alleged misappropriation of US$1.18 billion of loans from Retirement Fund Incorporated (Kwap).
In its civil action against Najib, SRC claimed that Najib exerted control over the board via the company's then-CEO Nik Faisal Ariff Kamil.
Sitting in the witness stand, Najib contended that Nik Faisal represented to him that the board made the investment decisions after due diligence was undertaken, and the former finance minister was in no position to micro-manage the company.
He denied SRC's contention that Nik Faisal is the link between the former premier and the board and that the former finance minister used the at-large former CEO to relay instructions to company directors.
"Looking at things now, it appears that Nik Faisal may have been playing both sides. To me, he would hold out that matters had been decided by the board and to the board, he held out that I had directed on matters.
"However, what baffles me is why the other directors of SRC including (then chairperson) Ismee (Ismail) did not bother to verify things with me directly and merely accepted the word of Nik Faisal. This is especially in relation to funds of the company.
"Ismee, as I mentioned was an experienced corporate man with tremendous experience in the way GLCs are run. He had my personal contact number and we had met on a number of occasions.
"Never once was I asked on the matters he said Nik Faisal had represented to the board," Najib testified before judge Ahmad Fairuz Zainol Abidin.
‘Hook, line and sinker’
During examination-in-chief by his lawyer Muhammad Farhan Muhammad Shafee, the defendant contended that SRC board members never sought advice from him, specifically as adviser emeritus.
Nik Faisal Ariff KamilNajib claimed he never received correspondence from the board in this regard, and he never provided advice as advisor emeritus.
"It again baffles me how a board comprising qualified and experienced persons could merely accept the say-so of Nik Faisal 'hook, line and sinker'," Najib testified.
The former Pekan MP also contended that he had no control over the utilisation and loss of RM3.6 billion of SRC funds, pointing out that he merely had the power to ratify decisions made by the board which should have carried out due diligence.
"By reference to the duties and powers accorded to me in SRC, I lack any position or power in the corporate governance structure to undertake any transactions of SRC.
"This is solely within the ambit of the board directors and I was never informed of nor was I able to carry out an independent verification of the disbursement of SRC funds.
"In particular, I play no role in the events concerning the events concerning the earmarking and eventual approval of the purported investment and the funds therein.
"By virtue of my positions, I have no trust of fiduciary obligations over the proposed investment and the funds utilised for the same.
"I also have no oversight nor control of the disbursement of the funds," Najib testified.
The former Umno president also dismissed as “preposterous” SRC's claim that he had the power to 'hire and fire' any director, explaining that such power usually lies in the hands of company shareholders.
"As I understand corporate governance principles, this does not detract from the directors’ statutory and legal duties to act in the best interest of the company.
"As I mentioned, the powers in SRC, as with 1MDB, in the hands of the PM (prime minister) was something quite normal when dealing with GLCs.
"This does not mean that the GLCs blindly adhere to what is orally represented to them as being directions of the PM, finance minister or any other person.
"I also repeat what I said earlier that the appointing or removal of directors has to be preceded with resolutions from the directors and of the company prior to the approval of the PM being sought," Najib said.
Under its new management, SRC filed the lawsuit in May 2021, alleging that Najib had committed a breach of trust and abuse of power, and personally benefited from the company’s funds, as well as misappropriated billions of ringgit.
SRC is also seeking a court declaration that the defendant is responsible for its losses due to a purported breach of duties and trust, and for Najib to repay RM42 million.
The plaintiff is also seeking a court order for Najib to be made accountable for the former’s US$1.18 billion loss and repay US$120 million of funds that allegedly flowed into the former finance minister’s bank account.
The civil action against Najib is linked to the alleged misappropriation of part of RM4 billion - RM3.6 billion or US$1.18 billion in foreign exchange rates between 2011 and 2012 - in loans that the company received from Kwap between 2011 and 2012.
Kwap is a statutory body under the Finance Ministry.
Najib is serving a six-year jail sentence over a separate criminal case involving a corruption case linked to RM42 million of funds from SRC. - Mkini

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