NAJIB Razak’s trial enters its 21st day today, with the 38th witness, former Retirement Fund Inc (KWAP) CEO Azian Mohd Noh returning to the stand after the Hari Raya break.

Azian last month corroborated previous testimonies of KWAP’s reluctance to approve a loan to SRC International for investment in natural resources because of the size of the loan and the company’s inexperience in the sector.

Azian, who was KWAP CEO from 2007 until she retired in 2013, also said she had met Najib over the loan.

Azian said she accompanied KWAP chairman Wan Abdul Aziz Wan Abdullah to meet Najib at his office in Putrajaya to inform him that the KWAP investment panel had decided it would only approve a loan of RM1 billion, despite a request from SRC International for RM3.95 billion.

She said the meeting was to convey the KWAP investment panel’s concerns over the size of the loan and its recommendation that the amount be reduced to RM1 billion.

Judge Mohd Nazlan Mohd Ghazali had questioned Azian on a gap in her testimony that omitted to show how a recommended loan of RM1 billion to SRC International in 2011 turned into RM2 billion in August 2011.

In her previous testimony, Azian had recalled KWAP fixed income department assistant vice-president Amirul Imran Ahmat preparing an investment paper for a RM2 billion loan to SRC International.

Azian told Nazlan that she could not remember the sequence of events that led to the loan amount being increased from RM1 billion to RM2 billion.

“I have stated earlier that at the subsequent meeting of the investment panel, Wan communicated to me, requesting me to inform the investment panel that the prime minister has communicated to him for KWAP to expedite the loan and that the amount of RM2 billion would suffice,” Azian told the court.

Azian also told the court last month that she had met Azlin Alias, a special officer who headed Najib’s economic policy team, in June 2011 to receive an application letter for a RM3.95 billion loan.

The letter, dated June 3, 2011, had a handwritten notation by Najib that said, “Bersetuju dengan cadangan ini (Agree with this proposal)”.  

Azlin died in 2015 in a helicopter crash that also killed minister Jamaluddin Jarjis, who was a close associate of Najib’s.

A second loan of RM2 billion to SRC International was later approved on March 28, 2012, after KWAP received a government guarantee from the Finance Ministry.  

Najib is charged with benefitting from a RM4 billion loan made out to SRC International in 2011 and 2012, from which he allegedly received RM42 million in 2014 and 2015.

He faces three counts of criminal breach of trust, three counts of money-laundering and one count of abuse of power. If convicted, he could be jailed up to 20 years.

Najib, 66, is represented by a dozen lawyers led by Muhammad Shafee Abdullah. Attorney-General Tommy Thomas leads the prosecution.

The Malaysian Insight brings you today’s proceedings live.

5.06pm: Court is adjourned for the day. The witness will return to the stand tomorrow morning.

4.56pm: Ismee says he stepped down as SRC director because of a major discrepancy in its audited accounts in 2013. The management requested all board members approve audited accounts of that year after discovering from media reports that the accounts had yet to be audited. 

He adds that he took responsibility for ensuring the accounts were closed before stepping down. 

He says by “management”, he is referring to CEO Nik Faisal.

4.20pm: Court resumes after recess.

Ismee is asked to verify minutes from the SRC International board of directors’ meeting.

4.03pm: Ismee says that Najib was the chairman of the 1MDB’s board of advisers.

The court then takes a 10-minute recess.

3.38pm: He is asked about a special meeting that took place. He says usually, special meetings are called due to urgent matters or because a meeting has not been scheduled.

3.34pm: Ismee Ismail is brought back into the court to continue his examination by the DPP. He is asked to verify the minutes of the meeting of SRC International’s board of directors.

3.32pm: Judge Nazlan says that until the authenticity of the minutes are verified by the MACC, they cannot be used for now.

2.50pm: Harvinderjit asks for the witness to be excused before he makes his submission that the document is fake.

2.45pm: DPP Sithambaram argues against the prosecution’s claim that a document submitted as evidence is fake. The document contains the minutes of a purported SRC International’s board of directors’ meeting between Nik Faisal and Najib.

2.37pm: Court is back in session with Ismee Ismail taking the stand to continue his examination by the DPP.

12.24pm: Deputy public prosecutor Ishak Mohd Yusoff asks Ismee to verify documents presented as evidence.

DPP asks Ismee why the SRC board had needed to seek Najib’s approval before approving the business development plan.

Ismee says that was the way things were done at SRC.

12.10pm: Ismee says he stepped down as SRC director on May 6, 2014, and officially left the company on August 15, 2014, and that he did not work during the intervening period.

Ismee says he resigned his position because he did not agree with the way Nik Faisal was handling the company finances and accounts.

He says most of SRC’s actions were carried out by Nik Faisal, but the board of directors also had to get the advice of Najib if it was to undertake any decisions.

Ismee says the board did not have direct communications with Najib and that Nik Faisal acted as the “link” between the two.

 He says he brought up issues about the daily running and governance of SRC, but Nik Faisal would always reply that decisions were discussed and finalised by the government.

Ismee: In my opinion, the government that Nik Faisal was referring to was Najib.

He adds that Najib had ultimate power to “hire and fire” any of the SRC board of directors.

11.57am: Ismee says he was nominated by Najib, along with four others, to sit on the SRC board.

He says SRC CEO Nik Faisal Ariff Kamil was responsible for the daily operations of the company and Najib, who was then prime minister was “adviser emiritus” to SRC.

Ismee says of the RM4billion loan from by KWAP, RM40 million was used to buy property, which was sold to an SRC subsidiary named Gandingan Mentari.

Ismee says Gandingan Mentari was run by Nik Faisal, who was a director, and Suboh Yassin. The company was formed to manage the property in Bukit Jalil.

11.40am: The 39th witness, former Tabung Haji CEO Ismee Ismail takes the stand.

Ismee says he became a non-executive director at 1MDB in 2009. He says he was appointed to the post by Najib.

11.10am: Najib’s lead counsel Shafee stands up to respond to Azian. 

Shafee: Was this influence, if there was ever one, self-induced? 

Azian: Whether I was compelled or whether I was influenced, so I was replying to that question… I do not think it was a strange reaction when they get a such request from their superior.

Shafee: As a responsible CEO of KWAP, would you have allowed KWAP to make a wrong decision based on that issue of influence?

Azian: As a CEO my fiduciary duty is to protect KWAP and to ensure they don’t suffer loss from their investments. The influence I am speaking of would to be facilitate the process of the loan. 

Shafee: I’m putting it to you that you would not have been make that sort of decision that is contrary to the interests of KWAP based on that hierarchy of influence.

Azian: Whatever influence, whatever I perceived definitely. I would not be doing something that would breach any law or any act.

Azian is released from the stand

The court takes a 10-minute break.

10.55am: Deputy public prosecutor Ishak Mohd Yusoff re-examines Azian.

Ishak asks Azian to define what she meant by “compulsion” and what she meant by “influence” in her testimony, regarding an advice letter from the Finance Ministry.

Azian: There’s no legal compulsion but I cannot say the same that there was no influence.  The letter came from the finance minister, the prime minister, the minister in charge of KWAP. He is my ultimate boss. I cannot deny there is a certain amount of influence.

10.30am: Harvinderjit asks Azian where she stands on SRC utilising KWAP funds for corporate social responsibility purposes. 

Azian: There are bound to be business expenses that has to be incurred by the borrower. I cannot put into detail what is allowed and what is not allowed.  If it’s a business expense, I’m very sure it is allowable.

Harvinderjit concludes cross-examination.

10am: Azian says for the second loan of RM2 billion, a request was included in an investment paper to require SRC International to provide quarterly reports on its investment. 

Azian: Additional facility was requested to be disbursed in one lump sum. There was concern.

Azian agrees with Harvinderjit that three KWAP investment panel members did grant approval for the additional loan facility of RM2 billion and that it should be disbursed in one lump sump.

9.40am: Harvinderjit refers to a letter wherein SRC International informed KWAP that the Finance Ministry had on February 16, 2012 approved the government guarantee.

Azian says it is beyond her knowledge how the government guarantee came about.

She agrees the advice letter is a statement from the ministry to indicate it had agreed that SRC International could apply for a loan from KWAP, and that it did not amount to a directive.

Harvinderjit questions the fixed income department’s ability to assess the viability of ventures in that it was able to foresee the “dubious and unforeseen.”

Harvinder: Based on the information and documents from SRC International, it all looked in order. Do you agree?

Azian: We have to trust the entity that is submitting the documents because they are liable for missing information.

9.25am: Harvinderjit asks about the role of the Treasury within the Finance Ministry.

Azian says she is not aware of the decision to transfer ownership of SRC International from 1MDB to the Finance Ministry.

She affirms the KWAP investment panel approved of the change of ownership in 2012.

Azian confirms the recusal of Wan Abdul Aziz and the KWAP investment panel in the matter of the transfer of ownership. She declines to comment on its meaning. 

Wan Abdul Aziz was also then secretary-general of the Treasury.

9.20am: Azian is called to the stand.

Najib, dressed in a beige suit, is in the dock.

Defence counsel Harvinderjit Singh proceeds to cross-examine witness. – June 10, 2019.