WHILE the Retirement Fund Inc (KWAP)‘s first RM2 billion loan to SRC International did not come about as a result of a direct order from Najib Razak, his position and endorsement influenced the decision to grant the loan, the court heard in the sixth week of trial.

Former CEO of the pension fund Azian Mohd Noh said she regarded the former prime minister and ex-finance minister as her “ultimate boss”, and thus could not deny he had a big influence on KWAP’s decision to lend SRC International Sdn Bhd billions of ringgit.

It was Azian who received, from a senior aide of Najib’s at a hotel, a loan application letter dated June 3, 2011, containing a signed notation by Najib indicating his endorsement for a RM3.95 billion loan. That amount was later reduced to RM2 billion by the KWAP investment panel.

“There’s no legal compulsion, but I cannot say the same that there was no influence,” Azian said of KWAP’s loans  to SRC International .

“The letter came from the finance minister, the prime minister, the minister in charge of KWAP. He is my ultimate boss. I cannot deny there is a certain amount of influence,” she told the Kuala Lumpur High Court. 

Meanwhile, the defence had issue with the apparent contradictions in former SRC International chairman Ismee Ismail’s testimony on the stand and his six-page witness statement recorded by the Malaysian Anti-Corruption Commission (MACC) last year.

Defence counsel Harvinderjit Singh told High Court judge Mohd Nazlan Mohd Ghazali that the defence needed time to go over Ismee’s oral evidence over the week and would address the alleged inconsistencies at a later date. 

Ismee had testified that the SRC International board adopted a shareholder resolution, or non-binding agreement, upon the advice of Najib in his capacity as a shareholder.

The defence argued that this contradicted Ismee’s witness statement, which said the board listened to the instructions of Najib as adviser emeritus.

During cross-examination, Ismee said he did not know that the company hired relationship managers to manage its company accounts at AmBank.

He said the board was not informed when ownership of the company was transferred to the Ministry of Finance (MoF) in February 2012 from 1Malaysia Development Bhd (1MDB), soon after a government guarantee was provided for its second loan of RM2 billion from KWAP.

He said the ownership change was approved in February 2012 on Najib’s orders via MoF.

He then repeated an earlier statement that he had never met Najib in his capacity as SRC board chairman despite the issues he encountered as he had wanted to investigate the matter himself.

Ismee chaired the board from 2011 to 2014 while Najib served as finance minister and chaired the 1MDB adviser board. SRC International was formed in January 2011.

Earlier in the week, Ismee also testified that the SRC International board never sought to verify CEO Nik Faisal Ariff Kamil’s statements and directives.

He said the board trusted Nik Faisal, who served as the “link” between the entity and former prime minister.

Ismee had earlier this week clashed with the defence on the interpretation of the minutes of a meeting between Nik Faisal and Najib on September 7, 2011.

The two discussed how SRC International is to deposit RM1.8 billion into certain bank accounts in Switzerland and Hong Kong after it received its first loan disbursement.

The meeting occurred about a week after KWAP disbursed its first loan of RM2 billion to SRC International on August 29, 2011.

At the meeting, Najib  approved deposits of RM1.5 billion to a BSI Ltd bank account in Switzerkand and RM300 million to a Julius Baer Group account in Hong Kong.

The minutes’ veracity is disputed, and Nazlan has agreed not to file it yet as evidence.

Nik Faisal is currently missing and sought by police.

Najib, 66, faces three counts of criminal breach of trust, three counts of money-laundering and one count of abuse of power. If convicted, he could be jailed up to 20 years.

He is represented by a dozen lawyers led by Muhammad Shafee Abdullah.

Attorney-General Tommy Thomas leads the prosecution, while Kuala Lumpur High Court judge Mohd Nazlan Mohd Ghazali presides over the trial. – June 16, 2019.