Najib testifies he had no control over SRC International funds

KUALA LUMPUR: Former prime minister Datuk Seri Najib Tun Razak testified in the High Court today that he had no control over the movement or use of RM3.6 billion in funds from SRC International Sdn Bhd, which the strategic investment company received in two tranches from Retirement Fund Incorporated.

Testifying as a defence witness in SRC International’s USD1.18 billion civil suit against him, Najib, 71, stated that his role in the company was solely to ratify decisions made by its Board of Directors (BOD), which was expected to conduct the necessary due diligence.

“By reference to the duties and powers accorded to me in SRC, I lack any position or power in the corporate governance structure to undertake any transactions of SRC as it is solely within the ambit of the BOD. I was never informed of nor was I able to carry out an independent verification of the disbursement of SRC funds.

“Particularly, I played no role in the events concerning the earmarking and eventual approval of the purported investment and the funds. By virtue of my positions, I have no trust or fiduciary obligation over the proposed investment and the funds utilised for it. I also have no oversight nor control of the disbursement of the funds,“ said Najib.

As Finance Minister at the time, Najib was the sole shareholder of SRC International by way of the Ministry of Finance Inc.

Najib asserted that it is quite preposterous to imply that his position as Prime Minister granted him the authority to hire and fire directors at SRC International, thereby enabling him to exert control over the BOD.

“The power to hire or remove any director is usually in the hands of the shareholders of a company. As I understand corporate governance principles, this does not detract from the directors statutory and legal duties to act in the best interests of the company.

“As I mentioned, the powers in SRC, as with 1Malaysia Development Berhad (1MDB), in the hands of the prime minister was something quite normal when dealing with Government-Linked companies (GLC). But this does not mean that the GLCs blindly adhere to what is orally represented to them as being directions of the PM or Minister of Finance or any other person,“ he said.

In May 2021, coming under new management, SRC International filed the lawsuit, accusing Najib of breach of trust, abuse of power and personally benefiting from the company’s funds and misappropriating the same.

SRC International previously removed five of its directors, including Ismee Ismail, from the lawsuit, retaining Najib as the sole defendant. However, the High Court permitted Najib to issue third-party notices against the former directors.

The company seeks a declaration holding Najib accountable for the company’s losses due to his alleged breach of duties and trust and for him to compensate the RM42 million loss they incurred.

The trial before Judge Datuk Ahmad Fairuz Zainol Abidin resumes tomorrow.