OF the three loan agreements made out by the Finance Ministry to help SRC International Sdn Bhd pay off the interest on billions in debt owed, only the first amounting to RM92 million was approved by cabinet, the court heard today.

Afidah Azwa Abdul Aziz, who is deputy secretary of the finance ministry’s strategic investment division, told the Kuala Lumpur High Court today of the three loans amounting to RM605 million made out in 2015, 2016 and 2017, only the first was endorsed by cabinet.

She testified that the government issued a loan agreement of RM92 million in November 6, 2015, a stand-by credit of RM250 million (of which RM213 million was used) in September 27, 2016 and a loan agreement of RM300 million in December 13, 2017.

She said the 2016 stand-by credit received approval of the Treasury secretary-general and second finance minister.

She does not know if the third loan was approved by cabinet as her role in the ministry has changed by then.

Defence counsel Harvinderjit Singh questioned her whether then second finance minister Johari Ghani expressed the need for SRC International to retrieve funds that were frozen in Switzerland after news of the 1Malaysia Development Bhd (1MDB) scandal broke in mid-2015.

Afidah denied this, saying the main concern of the ministry was to prevent an “event of default”.

She added that she was not aware of a meeting between current finance minister Lim Guan Eng and Swiss banking authorities.

Earlier today, Afidah testified that SRC International still owes Retirement Fund Inc (KWAP) RM4.15 billion in principal debt plus interest for unpaid government-guaranteed loans issued in 2011 and 2012.

Afidah told the court the debt will be settled by 2022, or 10 years after the second credit facility of RM2 billion was disbursed.

“Up until now, the government is still paying the debt for SRC International to KWAP, and this will continue until the principal debt plus interest are fully settled.”

Afidah, 44, who is the prosecution’s 41st witness, also said SRC International owes the government RM650 million after the ministry bailed out the entity three times following its failure to settle its debt in time.

The trial continues tomorrow. – June 19, 2019.