SRC trial: Najib who ‘orchestrated’ SRC’s RM42m fraud, must enter defence to answer himself

Kenneth Tee
Datuk Seri Najib Razak at the Kuala Lumpur High Court October 22,2019. — Picture by Miera Zulyana

KUALA LUMPUR, Oct 22 — Datuk Seri Najib Razak must be called to his defence to explain his complicity in the misappropriation of RM42 million belonging to SRC International Sdn Bhd by abusing his power as prime minister and finance minister, the High Court heard today.

In the submission at the close of the prosecution’s case, Attorney General Tan Sri Tommy Thomas said Najib had from the beginning orchestrated the fraud by taking numerous steps and measures to ensure it benefited the accused in the form of gratification over a period.

“What interest did the accused have? He was involved in the formation of SRC International; he ensured the Retirement Fund Incorporated (KWAP) was a friendly lender; he obtained RM4 billion in two separate loan applications from KWAP and he arranged government guarantees for the loans.

“The gratification is the RM42 million he received. We say this is deliberate, premeditated and designed by the accused,” Thomas said before High Court judge Mohd Nazlan Mohd Ghazali.

Thomas then referred to Cabinet meeting over the granting of government guarantees on the SRC International’s RM4 billion loan applications which was attended by the 40th prosecution witness Tan Sri Mazidah Abdul Majid and Najib in February 2012.

Based on the Code of Ethics for members of Administration and Members of Parliament, Thomas points out that it is stated that a cabinet member must declare their interest and leave the room.

“One, the accused should have declared his interest, which is recorded in a book, and two, he should recuse himself. And when he returns to the meeting, that must be recorded as well. All of that did not happen.

“The accused previously recused himself so he cannot feign ignorance of the law. He is aware of it and the only question is why he did not carry it out here,” he said, referring to Mazidah’s evidence that Najib had left Cabinet meetings in the past to avoid conflicts of interest.

Attorney General of Malaysia Tan Sri Tommy Thomas is seen during SRC Trial at Kuala Lumpur High Court October 22,2019. — Picture by Miera Zulyana

He said Najib was also brazen in his conduct due to the latter’s position as prime minister and finance minister in the Cabinet, stating that ministers were well-aware of Najib’s authority to hire and fire individuals as noted in the sacking of then deputy Tan Sri Muhyiddin Yassin and former AG Tan Sri Abdul Gani Patail in 2015.

Thomas also said there no doubt Najib was very much involved in the formation of SRC International as the company’s memorandum and articles of association was hastily amended to give the prime minister ultimate power.

“He was the emperor of the company,” Thomas quipped.

Thomas, therefore, said it was wrong to say Najib had no interest in SRC International when company funds ended up in his personal bank accounts as Thomas pointed out that company assets — the money — had ended up in Najib’s pocket.

He also said there is also a question on SRC International’s first RM2 billion loan application when it only possessed a share capital of only RM1 million, an amount that Thomas suggested was insufficient to fund Najib’s greedy measures.

“The first thing SRC required was loan capital and they needed to borrow big, but nobody in the private sector would have given the RM2 billion loan because of its massive risk.

“So, they needed a guarantor for their loan and the accused who is the prime minister and the finance minister then turns up,” Thomas said, adding that this was why both loans from (KWAP) were guaranteed by the federal government.

Arguing further, Thomas also said the standard operating procedure for the second government guarantee in March 2012 was flawed as it was given out before SRC International’s RM2 billion loan was approved, which was made possible through Najib’s position as finance minister. 

“How incestuous the whole relationship was,” Thomas remarked, adding that Najib played an important role in every part of the transaction as if an orchestra was being directed.

On the three money-laundering charges Najib faced, Thomas pointed out that bank account holders were obliged to be vigilant to ensure their accounts do not contain proceeds from unlawful activities. 

“There is a contractual obligation by the customer (ie: the accused) to check his account statement and verifying the monthly bank receipts within reasonable period — of two months — to say you have wrongly deposited into my account.

“The accused has to explain — with a total salary of less than RM1 million yearly — how RM42 million is credited into his account.

“And in the plenty of cheques he issued, hundreds of them, is it not significant that not a single cheque bounced? That is remarkable,” he said.

Earlier, Thomas also highlighted how Najib had previously submitted a sworn affidavit for a 2018 defamation suit with former transport minister Tun Dr Ling Liong Sik that confirmed RM42 million from SRC International had entered his bank accounts without his knowledge.

Therefore, Thomas said, Najib must be called to enter his defence to explain how is this so for someone who earned less than RM1 million per year yet received RM42 million.

Earlier, Najib’s lawyer Harvinderjit Singh submitted that the prosecution had not made out a prima facie case as the predicate offences Najib was charged with — criminal breach of trust and abuse of power — have not been proven, therefore the money-laundering charge would not come into play.

He also says that the mere fact that the money went into Najib’s account does not prove an offence under the Anti-Money Laundering Act, Anti-Terrorism Financing Act and Proceeds of Unlawful Activities Act (AMLATFA).

Najib’s SRC International trial began on April 3 this year with the prosecution calling 57 witnesses to the stand.

Out of the seven charges Najib faced, the Pekan MP is accused of committing three counts of criminal breach of trust over a total RM42 million of SRC International funds while entrusted with its control as the prime minister and finance minister then, and a separate charge under an anti-corruption law of abusing the same positions for self-gratification of the same RM42 million sum.

The remaining three of the seven charges are for allegedly money-laundering the same total sum of RM42 million.

 

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