NAJIB Razak was an “outsider” of SRC International and not a “shadow director” as charged under Section 402A of the Penal Code, his defence team told the Court of Appeal today.

Lawyer Muhammad Shafee Abdullah said the trial judge had misdirected himself in his interpretation of the definition of “director” of the said provision.

The lead defence lawyer added that this was a “cornerstone” of the judgment in the criminal breach of trust (CBT) charges against Najib.

High Court judge Mohd Nazlan Mohd Ghazali last July found Najib guilty of seven charges – one count of abuse of position, three counts of CBT and three counts of money laundering – relating to the misappropriation of RM42 million belonging to SRC International, a former unit of 1Malaysia Development Bhd.

According to Section 402A of the Penal Code, the lawyer read, “‘director’ includes any person occupying the position of director of a company, by whatever name called, and includes a person who acts or issues directions or instructions in a manner in which directors of a company are accustomed to issue or act, and includes an alternate or substitute director, notwithstanding any defect in the appointment or qualification of such person.”

Based on that, Shafee said Najib was certainly not an “insider” of SRC.

“The person ‘who acts or issues directions or instructions in a manner in which directors of a company are accustomed to issue or act’ must be a person ‘occupying the position of director of a company, by whatever name called’,” Shafee said.

“It is not permissible to give an extended meaning to the plain words of the section on the ground.

“The primary issue to be determined by this honourable court is whether the learned judge was right to have imported the concept of ‘shadow director’ into the definition of ‘director’ in Section 402A of the Penal Code.”

Shafee also said Nazlan had erred in adopting the civil law and common law concept of a shadow director from England to convict the former prime minister.

Lead prosecutor V. Sithambaram last week told the Court of Appeal that the running of SRC was a “one-man-show” by Najib where SRC board of directors were “puppets dancing to Najib’s tune”.

The prosecution added that Najib - who was the prime minister, finance minister and adviser emeritus of SRC placed under the Ministry of Finance Incorporated (MoF Inc) – had overarching control and had micromanaged the company.

The former prime minister is currently out on a RM2 million bail, appealing against his conviction and jail sentence.

The defence continues its submission-in-reply before a three-man bench, led by judge Abdul Karim Abdul Jalil. The two other judges are Vazeer Alam Mydin Meera and Has Zanah Mehat. – April 28, 2021.