FORMER SRC International chairman Ismee Ismail returns to the stand for the third day today where he will be cross-examined on the protocol and regulations for the appointment of the board members.

The defence argues that the accused Najib Razak was not fully involved in the running of SRC International and that the board could in fact appoint the directors on its own. 

Ismee testified yesterday that Najib had added a clause in SRC International’s constitution to make himself adviser emeritus, effective giving him control of the board.

The amendment was tabled by the then prime minister in an extraordinary general meeting on April 23, 2012.

Ismee said the board only learnt of the EGM nearly two months later on June 8, when it was briefed by SRC International CEO Nik Faisal Ariff Kamil.

The amendment also gave Najib control over SRC International, which was by then owned by the Ministry of Finance (MoF).

This also meant that Najib was the sole shareholder in his capacity as finance minister, Ismee said, adding that Najib was able to control SRC International through its CEO Nik Faisal Ariff Kamil.

Ownership of SRC International was transferred from 1Malaysia Development Bhd to MoF in February, 2012. Najib also chaired 1MDB’s advisory board.

Earlier, Ismee told the court that Nik Faisal was appointed as a director at SRC International on Najib’s orders.

SRC was later placed under the Minister of Finance Incorporated (MoF Inc) on February 14, 2012.

Najib, who was finance minister at the time, also had direct control over MoF Inc. 

Nik Faisal, who was described as a vital “link” between SRC International and Najib, is sought by police for questioning and remains at large in Indonesia, according to reports.  

Najib’s charges in this trial relate to the RM4 billion loan to SRC International made out in 2011 and 2012, for which he is accused of receiving RM42 million in his accounts 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 faces up to 20 years in jail.

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.

The Malaysian Insight brings you today’s proceedings live:

5.11pm: Court adjourns for today, and will continue with Ismee taking the stand again tomorrow at 9am for his fourth day of cross-examination.

5.08pm: Harvinderjit is going through the meeting minutes, which show that the then board did not know the account was opened.

4.51pm: Ismee says he had to get the prime minister’s approval. Harvinderjit says there is nothing in the minutes suggesting such a thing.

Ismee replies that when he was chairman, he reported to Najib.

4.22pm: Court resumes. Lawyers go through the minutes of an SRC International board meeting.

4pm: Court is in recess.

3pm: Ismee says he didn’t know of money coming in and going out of the “736” account.

Harvinderjit asks if Ismee knew that the RM2 billion that came in to that account had gone out in one day, he says he was unaware.

2.52pm: Ismee says the board was not told which account the RM2 billion was deposited into. It had been put into the account that the board had no control over.

2.45pm: Ismee says the board was not aware there were two accounts opened in AmBank on behalf of SRC International. He says it had no control over the second account that ends with “736”.

Ismee says Nik Faisal and Shahrul as board directors should have informed the board that there was a second bank account.

2.35pm: Court resumes with Harvinderjit asking Ismee if the board was aware if bank accounts were open for the company. Ismee says he did not know.

Ismee says the board was not told of a resolution to add Terence Geh as a signatory to one of their accounts.

Ismee also says he was not told of any transactions that were carried out in that account.

12.50pm: The lawyer and the witness go over an email thread in which Nik Faisal gives KWAP the details of SRC’s potential investments in Indonesian companies.

Harvinderjit asks Ismee if the board was informed of these investments. Ismee agrees it was not.

Ismee says he was not told of any of Nik Faisal’s meetings with KWAP nor their correspondence.

Court is adjourned until 2.30pm.

12.30pm: Harvinderjit asks Ismee whether he was told how the KWAP loans came to be.

Ismee says he was not informed. He was not at the board meeting.

Ismee says he was not told of any meeting between Nik Faisal and KWAP that resulted in the RM4 billion loan.

Harvinderjit reads out an email between Nik Faisal and KWAP. He asks Ismee if the 1MDB board knew they were to guarantee the loan.

Ismee says that he can’t remember if the 1MDB board had authorised Nik Faisal to apply to KWAP for a loan.

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

Harvinderjit refers to an email between Nik Faisal and KWAP personnel.

Ismee says he cannot recall if there was any application from KWAP for disclosure of SRC’s information.

Harvinderjit suggests Nik Faisal used the same method in his dealings with KWAP as no board members were informed.

12pm:  Harvinderjit asks Ismee if he always carries around a pen. Ismee says yes.

Harvinderjit says this means it is possible that all the meeting minutes that the court has seen were signed by Ismee in one sitting when he was at SRC.

Harvinderjit says the minutes look like they were all signed by the same pen at the same time and at the same place. 

11.40am: Harvinderjit resumes cross-examining Ismee.

Harvinderjit asks Ismee about a SRC board resolution August 23, 2011 to include signatories for the company’s AmBank Account. 

Ismee says he cannot recall if the form to open a bank account was presented in the meeting for the designated signatories to sign.

9.50am: Harvinderjit takes the witness back to end-2010, when SRC was being conceptualised as a vehicle for long-term strategic investments in natural resources.

Ismee agrees former SRC CEO Nik Faisal Ariff Kamil played an important role in the founding on the company.  

Harvinderjit: It leads you to believe that his man is high level.

Ismee says he does not know if Nik Faisal held a position in 1Malaysia Development Bhd, which owned SRC International until February 2012, when ownership was transferred to the MoF.

It was the 1MDB CEO Shahrol Azral Ibrahim Halmi who decided on senior appointments, he adds.

Ismee says he only learnt the details of SRC International at its first board meeting in August 23, 2011.

Ismee says 1MDB provided SRC International with a startup capital of RM1 million and the latter later received a RM20 million launching grant from the Economic Planning Unit. SRC International had initially asked the EPU for RM3 billion, the court was told earlier in the trial.

Court takes a 10-minute recess.

9.20am: Former Pahang MB Adnan Yaakob is observing today’s proceedings from the public gallery.

9.30am: Ismee is on the stand under cross-examination by defence lawyer Harvinderjit Singh on the company protocols of SRC International.  – June 12, 2019.