LIVE: Court adjourns early to allow closer examination of documents

Timothy Achariam Yvonne Lim

Former 1MDB director Ismee Ismail arriving at the Jalan Duta court complex for the 24th day of Najib Razak's SRC International trial. – The Malaysian Insight pic by Seth Akmal, June 13, 2019.

NAJIB Razak’s SRC International trial enters its 24th day today, with former SRC International board chairman Ismee Ismail returning to the stand for the fourth time.

If his presence in court extends beyond today, he would be the longest-testifying witness, more than AmBank manager R. Uma Devi.

Ismee will be cross-examined by the defence over Nik Faisal Ariff Kamil’s role in the second loan of RM2 billion from Retirement Fund Inc (KWAP) to SRC International.

Nik Faisal, who was SRC International CEO and director, is missing and sought by the police.

Ismee told the court yesterday that the SRC International board was not fully aware of Nik Faisal’s dealings with KWAP, which led to the government entity extending the first loan of RM2 billion in 2011.

Nik Faisal did not inform the board that he had asked KWAP for a RM3.95 billion loan. Ismee said no one reported to him at any time that meetings were ongoing between SRC International and KWAP personnel.

Ismee also told the court that as board chairman, he needed Najib’s approval on matters, such as transactions, despite previous suggestions that the former prime minister had a limited role.

Ismee said this as he clashed with defence counsel Harvinderjit Singh on the interpretation of the minutes of a meeting between Nik Faisal and Najib on September 7, 2011.

The meeting discussed the deposit of RM1.8 billion in SRC International funds into banks in Switzerland and Hong Kong after the entity received its first loan disbursement in mid-2011.

The meeting between Nik Faisal and Najib occurred about a week after KWAP disbursed its first loan of RM2 billion to SRC International.

At that meeting, Najib approved a deposit of RM1.5 billion into Swiss bank BSI Ltd and another RM300 million into Julius Baer Group in Hong Kong. The money was from KWAP’s first loan to SRC International, which was made out on August 29, 2011.

The charges against Najib 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.

Najib, 66, is represented by a dozen lawyers led by Muhammad Shafee Abdullah. Attorney-General Tommy Thomas leads the prosecution while justice Mohd Nazlan Mohd Ghazali presides over the trial.

The Malaysian Insight brings you today’s proceedings live:

12.40pm: Shafee is addressing judge Nazlan about the way the cross examination is being carried out. He says they need to look at the resolutions and study the meeting minutes. He says they will require consultation among themselves from time to time to look thoroughly.

The lawyer says the application is necessary as he needs time to go through the transcript of Ismee’s testimony since Monday.

Shafee submits an application for adjournment till tomorrow morning. Sithambaram agrees as Shafee needs to examine the transcript of the proceedings today.

Judge Nazlan allows this and court is adjourned to tomorrow morning at 9am.

12.35pm: Court resumes.

12.08pm: Court takes a five-minute break.

11.53am: Ismee said administrative matters also do not require a shareholders’ resolution.

11.51am: Harvinderjit continues going through the shareholders’ resolutions on investments with Ismee.

He asks if the resolutions are recorded as minutes. Ismee said they will.

11.50am: Court resumes.

11.30am: Court takes a short break.

11.22am: They are still verifying the shareholders’ resolutions on investments.

11.08am: Harvinderjit grills Ismee on the shareholders’ resolutions on the investment terms made by SRC International.

(From left) DPP Ishak Mohd Yusoff, V. Sithambaram and Suhaimi Ibrahim during a break at Najib Razak’s SRC International trial today. – The Malaysian Insight pic by Seth Akmal, June 13, 2019.

10.38am: Harvinderjit asks what’s the standard the board follows to determine what’s good or not good.

Ismee: I can’t say in black and white.

10.36am: Harvinderjit asks if instructions from 1MDB shareholders must be followed.

Ismee: We follow if unless it’s something wrong. Something is not right.

10.35am: Harvinderjit said Ismee is giving the impression that the board of directors were of the belief that instructions from the shareholders are binding.

Ismee: I follow.

Harvinderjit: Follow means agree?

Ismee: That’s my answer I follow. This is something we have to follow full stop. You’re twisting words. We don’t say binding. We just follow.

10.32am: Ismee said he wants to elaborate but Harvinderjit does not allow him to.

V. Sithambaram interjects, saying the witness should be allowed to elaborate on his answer.

The judge allows Harvinderjit’s questioning to go on after he tells the court that if Ismee is allowed to elaborate on yes or no questions, the questioning will take the whole day.

10.29am: Harvinderjit said the board of SRC had fiduciary duty of all assets in the company and if Ismee still maintains it was good enough for the board to take instructions from a shareholder.

Ismee: I can’t answer that question with a yes or no answer.

Harvinderjit: If you don’t answer, then you’re running away from the question.

Ismee: I’m not running away. I’m here.

10.18am: Harvinderjit asks if the board was aware of how transactions took place in SRC International. Ismee said not really.

10.16am: Harvinderjit asks if Ismee never thought the CEO lying to the board about the accounts being audited is serious enough to inform the shareholders.

Ismee: I can’t say. It’s too technical.

Harvinderjit: You had enough concern to go and look for the prime minister’s secretary to tell him about your resignation but you couldn’t escalate this issue? Would you agree?

Ismee: I can’t say I can agree or not.

Harvinderjit: In your mind the fact that the CEO lied to the board and indirectly lied to the shareholders, it was not cause of concern for the board to escalate this to the shareholder?

Ismee: I think this is case by case.

Harvinderjit: Are you trying to tell this court that the board of SRC didn’t have to use their own decision making powers as long as Nik Faisal told you what the shareholder wants?

Ismee: No.

Harvinderjit: Was the board of the impression that if Nik Faisal says he had a conversation with the prime minister then he is to be believed?

Ismee: We trust him.

Harvinderjit: Is that a yes?

Ismee: We trust him means we trust him-lah.

10.09am: Ismee said he disagreed with Harvinderjit’s questioning that he just quit the company.

He said he called the auditors to confirm if the accounts had been audited and closed and assumed the responsibility to close the accounts.

He asked the auditor repeatedly if they had anything to tell the board but the auditor didn’t say anything.

Ismee said he felt responsible to ensure the accounts were closed before he left, adding that the prime minister’s office was well aware of the reason he stepped down from SRC International.

Former prime minister Najib Razak arriving at the Jalan Duta court complex for the 24th day of his trial, where he faces multiple charges in relation to RM42 million of SRC International’s funds deposited into his accounts. – The Malaysian Insight pic by Seth Akmal, June 13, 2019.

10.07am: Harvinderjit asks why Ismee didn’t think it serious to report what had happened in SRC International in terms of its audited accounts.

Ismee said he didn’t like what had happened in the company.

10.04am: Ismee said he had no reason to doubt correspondences that Nik Faisal presented from Najib to the board.

Harvinderjit asks if Ismee could speak directly with the prime minister or MoF Inc if he found something amiss with Nik Faisal’s reporting. Ismee agreed.

10.03am: Harvinderjit said: “If your best interest is aligned to the best interest of the government. It was anchored on the fact that you will deal with matters that will extend to the Malaysian public, if the government was a shareholder that means the people of Malaysia are.

Ismee: Yes.

Harvinderjit: I’m not agreeing with this I’m just stating. Any directive from Najiib came from Nik Faisal, you say he was your boss. You were influential at that time. Could you ask for a meeting with the prime minister?

Ismee: Correct.

10am: Harvinderjit asks who are the shareholders.

Ismee replied 1MDB and MoF Inc.

9.58am: Harvinderjit asks if SRC International must get approval from 1MDB for any decision it makes or it will be against Section 132 of the Companies Act.

Ismee said prosecution must understand from the whole picture of birth of 1MDB.

“We had the adviser emeritus who was finance minister and prime minister. We have to understand that he was the ultimate boss. We didn’t see anything wrong with it. We do things in accordance with the law.”

He said the best interest of the company is the best interest of the shareholder and vice-versa.

9.45am: Ismee takes the stand.

9.39am: Najib makes his way back to the courtroom after a coffee break in the cafeteria. 

9.14am: Judge Nazlan grants permission and court to reconvene at 9.45am.

9.10am: Court is in session but the prosecution is asking for a short stand down as Shafee is in a different court for case mention before judge Colin Sequerah.

They asked for a stand down until 9.45am.

9am: Najib arrives in court clad in a navy blue suit and makes his way upstairs. – June 13, 2019.

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