KUALA LUMPUR: The High Court here was today told that SRC International Sdn Bhd failed to perform due diligence on the RM1.8 billion, the first Retirement Fund Incorporated (KWAP) loan, before transferring it offshore for purported investment activities.
SRC International's former director Datuk Shahrol Azral Ibrahim Halmi, 54, said no due diligence was carried out as the directors' circular resolution (DCR) was signed and approved by Datuk Seri Najib Razak, who was the prime minister and minister of finance at the time.
Shahrol Azral said this when testifying as a third party in SRC International's US$1.18 billion civil suit against Najib and its former chief executive officer Nik Faisal Ariff Kamil.
"I felt I was under obligation from the instructions of the PM. I would have preferred for information to be available but I went ahead and signed it. It wasn't only instructions, this was signed by the PM and former finance minister and shareholder of 1MDB so that carried a lot of weight.
"We tried to find as much information as we could but when it came to execution the PM signed off...so we had to do it. The PM thinks its a good idea, I trust his judgments," said the witness when queried by Najib's counsel Harvinderjit Singh.
The loan money was transferred to Falcon Private Bank Ltd in Switzerland and Julius Baer in Hong Kong, to be used to acquire two companies in Indonesia (PT ABM Investama and Bumi Resources TBk PT) and two companies in Mongolia (Gobi Coal and Energy Limited and Erdens-Tavan Tolgoi).
In the SRC criminal trial in 2019, former SRC chairman Tan Sri Ismee Ismail testified that Nik Faisal was ordered by Najib to transfer out the money in a meeting on Sept 7, 2011.
SRC, under its new management, filed the suit in May 2021, claiming that Najib had committed a breach of trust and power abuse, personally benefited from the company's funds and misappropriated the said funds.
It is also seeking a court declaration that Najib is responsible for the company's losses due to his breach of duties and trust and for Najib to pay back the RM42 million in losses that they have suffered.
Najib, 70, has been serving a jail sentence at the Kajang Prison since Aug 23, 2022, after being convicted of misappropriating RM42 million in SRC International funds.
He then filed a petition for a royal pardon on Sept 2, 2022, and the Pardons Board in January this year reduced Najib's jail term from 12 years to six, with the fine cut to RM50 million from RM210 million.
The trial before Judge Datuk Ahmad Fairuz Zainol Abidin continues on May 6 at 9.30am. – BERNAMA