THE SRC International board was not fully aware of the CEO’s dealings with Retirement Fund Inc (KWAP) which led to the government entity extending the company the first loan of RM2 billion in 2011, the Kuala Lumpur High Court heard today.

Prosecution witness Ismee Ismail, who was SRC International board chairman during the time, testified that CEO Nik Faisal Ariff Kamil did not inform the board that he had asked KWAP for  a RM3.95 billion loan.

Ismee, who was also then a director on the 1Malaysia Development Bhd board , said he could not remember if the 1MDB board had authorised Nik Faisal to seek a RM3.95 billion loan from KWAP.

Ismee said it was never reported to him at any time that meetings between SRC International and KWAP personnel were ongoing.

The defence today went through a thread of emails which Nik Faisal forwarded to KWAP on the details of potential investments in Indonesian companies.

Ismee said he had no knowledge of Nik Faisal’s meetings with KWAP and correspondences. 

SRC International was a subsidiary of 1MDB until February 2012 when ownership was transferred to the Finance Ministry.

Ismee said the 1MDB board was also not informed that the company could have secured a loan from KWAP with a corporate guarantee instead of a government guarantee.

The 1MDB board did not know that KWAP had offered the loan on condition of a corporate guarantee from 1MDB, which option the board would have preferred.

Ismee did not clarify in the account whether the board knew KWAP had previously offered the loan to 1MDB instead of to SRC International, as testified by officers from the fund.

Ismee told the court yesterday that SRC International board was not informed of its own company performance reports, which were submitted directly to MoF.

Ismee said the SRC International board never received the reports nor was it aware that the reports were submitted to MoF.

The board had taken CEO Nik Faisal’s word that he was in regular communication with Najib, who was adviser emeritus to SRC International. 

Ismee said Najib had never attended an SRC International board meeting. 

Najib is charged with criminal breach of trust, money laundering and power abuse in connection to a RM4 billion loan from KWAP to SRC International made out in 2011 and 2012, for which he allegedly received RM42 million in 2014 and 2015

He faces up to 20 years in jail, if convicted.

Najib, 66, is represented by a dozen lawyers led by Muhammad Shafee Abdullah. Attorney-General Tommy Thomas leads the prosecution and Justice Mohd Nazlan Mohd Ghazali is the sitting judge. – June 12, 2019.