NAJIB Razak’s SRC International trial enters its 29th day today, with Finance Ministry officer Afidah Azwa Abdul Aziz returning to the stand as the 41st witness.

Afidah, who is deputy secretary at the ministry’s strategic investment division, testified yesterday 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 Kuala Lumpur High Court that the debt will be settled by 2022, or 10 years after the second credit facility of RM2 billion was disbursed.

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

SRC International also owes the government about RM650 million after the Finance Ministry bailed out the entity three times following its failure to settle its debt.

The government issued a loan agreement of RM92 million on November 6, 2015, standby credit of RM250 million – of which RM213 million was used – on September 27, 2016 and loan agreement of RM300 million – of which RM290 million was used – on December 13, 2017.

She said the loan agreements were made out to prevent KWAP from declaring an “event of default”, which would require the government, as the guarantor, to settle the loans of RM4 billion within 30 working days.

The loans were disbursed by KWAP to SRC International on August 29, 2011 for the first RM2 billion, and on March 28, 2012 for the remaining RM2 billion.

A government guarantee is a contingent liability, whereby the government bears the costs of the principal debt and interest should a company fail to settle its loan repayment, said Afidah.

Najib’s charges in this trial relate to the RM4 billion in loans to SRC International, from which he is accused of receiving RM42 million in his personal 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:

5pm: Court adjourns for the day. Hearing will resume on July 1.

4.15pm: Suboh reveals he went to Switzerland in September 2013 with the board of directors and Nik Faisal to make sure the money they invested was still with BSI bank in Lugano.

Ismee Ismail had previously testified to this before.

4.01pm: Court resumes with Suboh is being examined by the prosecution.

He says after he received the anonymous phone call from an MACC officer, he did not need to make a police report as he trusted it was an MACC officer.

3.37pm: Court is in recess.

3.34pm: After a week, Suboh says he flew to Bangkok and back to Malaysia.

“When I came back, Nik Faisal called me and asked me to flee again to avoid the authorities.”

He says he had made the decision not to run this time, and stayed in Malaysia to help with the investigation.

He says Nik Faisal called him to tell him to flee shortly after the general election.

3.30pm: He says he felt scared because Najib was prime minister and Suboh did not know what would happen to him or his family.

He says he made the decision to go to Bangkok for a month, with his wife.

He says he felt scared because at that time Nik Faisal had called him and told him about the SRC International case and warned him to run away as it implicated Najib.

While in Bangkok, Suboh says he had met a mysterious man who gave him and his wife plane tickets to Abu Dhabi. They took the flight to Abu Dhabi, and stayed at the Rosewood hotel for a week.

He says the flight tickets and stay were paid for but he was not sure who paid for them.

3.27pm: Suboh says in 2015 he had called MACC to make an appointment to discuss about SRC International. He then received a call by an anonymous person, saying they were with the MACC, warning him: “Datuk, no need to come, you just go away.”

He says that person had asked him to leave Malaysia.

He doesn’t know who called him.

3.23pm: Referring to SRC meeting minutes, Suboh says he had warned against an investment that SRC International proposed to make in Indonesia.

He says this investment was proposed by Nik Faisal but Suboh warned that “the business landscape is different in Indonesia compared to Malaysia”.

Suboh says he felt responsible for SRC International’s money.

He says as a director he did not have any power as everything was decided by Nik Faisal and Najib, with Najib holding the ultimate power to hire and fire any director.

He says he did not resign from SRC International because he felt responsible for the investments it had made and wanted to make sure the funds were safely returned.

3.17pm: Suboh says he had spoken out against a proposal that SRC International was going to invest the loans given by KWAP in Abu Dhabi.

He says he told the board that there was no “visibility target date”, no “clear vision” and that due diligence be carried out before moving forward with the investment.

3.13pm: He says he had brought up issues on due diligence issues and compliance with Nik Faisal.

He says Nik Faisal always had the same answer: “I have got clearance from the top”.

Suboh says person at the top refers to Najib.

3.08pm: He says a RM250 million grant was given by SRC International to Ihsan Perdana.

He says in his opinion, the grant amount was too large and that they needed to get a signed resolution from the board of directors.

Suboh says he brought up issues of compliance regarding this grant but Nik Faisal told him, “It will be taken care of” and this decision had been approved by someone “at the top”.

In Suboh’s opinion, the person “at the top” was in reference to Najib, who was SRC International adviser emeritus.

He says he never brought it up with Nik Faisal again.

Suboh has corroborated SRC International chairman Ismee Ismail’s testimony that all matters relating to the entity went through Nik Faisal and Najib.

3pm: Suboh now speaks about how SRC International’s CSR company Ihsan Perdana Sdn Bhd was formed.

He says they wanted to help flood victims via Ihsan Perdana.

2.50pm: Suboh says he was a signatory for a facility agreement between SRC International and KWAP for the loan.

He has corroborated that the letter of guarantee had Najib’s signature on it.

Suboh says he has very limited knowledge of the two KWAP loans as Nik Faisal had handled all the transactions.

2.40pm: Court resumes with Suboh reading fom his witness statement.

He says Nik Faisal had arranged the loan agreement for the two RM2 billion loans that SRC International got from KWAP.

1.03pm: Court is in recess.

12.59pm: Shafee addresses Nazlan about tomorrow’s hearing, saying he and his team will be in the Court of Appeal. He says he cannot promise that he will make it back from the appellate court by noon for the trial.

Sithambaram says the prosecution will wait for the defence if it continues tomorrow but asks Nazlan to vacate tomorrow’s session.

12.50pm: He names former witness Ismee Ismail, and Nik Faisal as board members.

Suboh confirms SRC International had made a loan request from KWAP for RM3.95 billion as working capital and general overseas investments.

He says SRC International subsequently made a loan request from KWAP for RM2 billion.

He says the board of directors had discussed this and Nik Faisal told the board he would get the loan backed by a ”government guarantee”.

12.47pm: He says on all SRC International shares were transferred to MoF inc on February 14, 2012 and it was signed off by SRC International former chief executive Nik Faisal Ariff Kamil.

12.41pm: Suboh had served in many government departments until his retirement in January 2009.

After he retired, he worked in SRC International as a non-executive director. He was appointed by Najib in 2011.

His job was to attend board of directors meetings and make decisions based on the agreement of the board.

SRC International was formed as a strategic resource company. He says SRC International intended to invest in coal, aluminium and uranium.

He says the board of directors were obliged to listen to the advisor emeritus, who was Najib.

12.34pm: Former SRC International director Suboh Md Yassin is the next witness on the stand. He has been placed under the witness protection programme by MACC.

He will be reading a witness statement he prepared with the help of MACC.

12.30pm: She says she doesn’t know if Najib has personal interest in SRC International or received money from the entity.

Sithambaram is now examining her.

She says in this case, there was no deliberation over the memorandum. The minister did not have time to excuse himself.

But she says the minister had an opportunity to declare his vested interest in the memorandum and leave.

Witness is excused from the stand.

12.26pm: Harvinderjit continues the cross examination.

12.15pm: Yusof Zainal Abiden continues the cross-examination.

He asks how a memorandum is tabled in the cabinet meeting.

She said the memorandums are arranged following the seniority of the ministers tabling them.

The agenda is then arranged according to that. After the PM’s speech at cabinet meetings, they will start discussing the memorandums.

Cabinet either discusses the memorandum or sometimes just approve or reject them, Mazidah said.

12.04pm: The owner of the company is related to Khairy, therefore, he had to walk out.

The second instance is Hishammuddin Hussein as defence minister walking out when the company involved was Nuzen Sdn Bhd.

Hishammuddin’s relative was someone in the company.

12.10pm: She said she was asked if Najib did ever walk out when SRC was discussed, she said no.

Shafee then asked is this her opinion.

She replies that she doesn’t give opinions, she was merely stating a fact that Najib did not walk out when asked the question.

12.08pm: She also cited an instance when Najib walked out of a cabinet meeting because they were discussing a memorandum on CIMB bank.

She said Najib walked out because a blood relation was involved with the bank.

12.03pm: In her witness statement, Mazidah cited that Khairy Jamaluddin exited a cabinet meeting because he had vested interest in the memorandum.

Shafee asks her why he walked out. She said she can’t reveal why because of the Official Secrets Act.

She can only reveal the company involved, which is Enra Land Sdn Bhd.

11.59am: Mazidah said usually when it involves MoF Inc, ministers never walk out.

Shafee said if the PM leaves and if the second finance minister leaves, then there will be no one to brief the cabinet. This means they’re abandoning their duty as the minister concerned. She said she’s unsure.

11.58am: Mazidah said she has to check her minutes during cabinet meetings, as ministers walked in and out.

In her memory, Najib never walked out of cabinet meetings when MoF Inc was discussed and neither did the finance minister II.

11.56am: Shafee said in 2012 Petronas bailed out MISC – a decision sharply criticised. Do you agree with me the prime minister never walked out of a meeting?

Mazidah said she can’t remember.

11.52am: Shafee asks her if someone assumes the post of prime minister, they are automatically linked with MoF Inc, especially if he’s the minister of finance.

Shafee said Petronas comes under MoF inc. Petronas is also under the wings of the PM.

Shafee asks her whether she remembers if Dr Mahathir ever walked out of cabinet meetings when the cabinet discussed Petronas’ bail out of Bank Bumiputra (in the 1980s).

She said this was not during her tenure, adding that she didn’t think Dr Mahathir left the cabinet meetings.

11.44am: Mazidah said in more than 21 years, she has never had a situation like this where the PM had vested interest in a company. She was a cabinet secretary during Dr Mahathir Mohamad, Abdullah Ahmad Badawi, Najib and Dr Mahathir’s again before she retired.

11.41am: Shafee said the code doesn’t apply to the PM because he doesn’t have personal interest in SRC International.

11.27am: Shafee said conflict of interest in clause 4 of the code of ethics is his area of importance and he will prove that there was no conflict of interest.

The code states that you must have a personal interest for it to be considered a conflict of interest.

11.24am: She said it’s the general procedure for ministers not be involved in cabinet meetings if there’s vested interest in the issue discussed.

It says in the code that if there other ministers who have private firms with their names on them, it’s not allowed.

Ministers who hold shares can’t have a controlling interest, Mazidah said.

11.23am:  Shafee goes through the cabinet code of ethics with Mazidah.

11.19am: Mazidah Abdul Majid, former cabinet deputy secretary-general, is back on the stand as the 40th witness.

Shafee begins cross-examination, picking up from where he left off two days ago.

10.57am: Nazlan said her answer she gave arose because of the cross-examination. Nazlan allows her answer. The witness is then excused from the stand.

Court takes a 10-minute break.

10.41am: Afidah said she asked why she had to prepare the memorandum and was told that she had to because her boss told her that this was the prime minister’s company.

The defence then argues that Afidah’s statement is hearsay. DPP V. Sithambaram said the law is very clear, she is testifying on what happened and that is not hearsay.

10.38am: Afidah said she had to believe what Nik Faisal Ariff Kamil told MoF because she was told to prepare the memorandum a few hours after meeting with the former SRC International CEO.

10.18am: Shafee is done with his cross-examination. He apologises to the witness if he was too harsh in his line of questioning with her.

10.13am: Shafee asks Afidah what was the minister of finance II’s role in the drafting of the memorandum.

The finance minister II at that time was Ahmad Husni Hanadzlah.

Shafee asks her why Husni was picked as the minister of finance II? He implies that Husni was a leading merchant banker before he joined politics. If anybody, he would know the inside-out of memorandums, such as government guarantees etc.

10am: Afidah tells the court she was rushed into completing the guarantee letter for SRC International when, in fact, she was under duress.

Shafee asks her what she meant by duress. She takes a long pause and replied she was pressured to complete it.

9.33am: She only started working in the guarantee unit in 2010. From 2010 to 2011, Afidah was involved in preparing five government guarantees.

9.32am: Court in session. Shafee cross-examines Afidah Azwa Abdul Aziz, the 41^st witness. – June 20, 2019.