Datuk Seri Najib Razak started off his day in court today by joining a handful of supporters in prayer, before going on to testify under oath in the SRC International Bhd trial, in which he is charged with misappropriating RM42 million of the company’s funds. (NSTP/MUHD ZAABA ZAKERIA)

KUALA LUMPUR: Datuk Seri Najib Razak started off his day in court today by joining a handful of supporters in prayer, before going on to testify under oath in the SRC International Bhd trial, in which he is charged with misappropriating RM42 million of the company’s funds.

The former Prime Minister, who was dressed immaculately in his trademark suit and tie, read from a prepared statement as he took to the stand about 10.30am.

However, there was a brief moment of awkwardness before he could start, as Najib was unable to produce his identity card (IC) when asked to do so by the court interpreter.

After fumbling about in his pockets, Najib said he did not have his IC on him before looking up at his aides in the gallery for help.

At this juncture, his lead counsel, Tan Sri Muhammad Shafee Abdullah got up and assured the judge that the defence would produce the IC shortly.

"I am sure we can all appreciate that people of this stature don't always have these things on their mind.

"Even former US president Barrack Obama experienced this after he left office. He was unable to buy a bouquet of flowers for his wife because he did not have his credit cards on him,” he said.

Judge Mohd Nazlan Mohd Ghazali nodded in response and Najib then went on to take the oath in English and Bahasa Malaysia before starting his testimony.

Shafee said his client would be reading from a prepared statement in Bahasa Malaysia.

"Given his position, it is only right that he testifies in the national language", he said.

A group of Najib's hardcore supporters, most of whom have been diligently following the trial from day one, listened attentively as he spoke in a clear, crisp voice while occasionally looking up at the judge to drive home points that he was making.

Among those present in the gallery to witness this historical day, on which a former prime minister of this country was testifying in his defence for the first time, were lawyers, representatives from the Malaysian Anti-Corruption Commission (MACC) and members of the press.

Najib's former deputy, Datuk Zahid Hamidi – who is himself facing corruption charges in another court, also made a brief appearance at around noon to lend his support.

Najib, 66, started his testimony by outlining his background and political career. This included his tenure as former Deputy Minister before he went on to become the Menteri Besar of Pahang and then as a Minister holding various portfolios.

The Pekan Member of Parliament proceeded to explain the formation of the 1Malaysia Development Berhad (1MDB) sovereign wealth fund.

He related how it started off as the Terengganu Investment Authority (TIA), which was established by the then-Yang DiPertuan Agong, Sultan Mizan Zainal Abidin, in early 2009.

He said fugitive businessman Low Taek Jho @ Jho Low was then already a close acquaintance of Sultan Mizan and his sister, Tengku Datuk Rahimah Sultan Mahmud.

Najib said the concept of TIA was formulated based on discussions between Jho Low, Sultan Mizan and the Terengganu government, and it had a capital of RM11 billion.

The capital was supposed to be derived from RM6 billion in oil royalty owed to the Terengganu state government, and the issuance of RM5 billion in Islamic Medium Term Notes (IMTN).

Najib said this, however, ran into problems when the Terengganu government could not agree with some of the terms, even though the bonds had been issued.

"The cabinet then decided to take over TIA. It was a decision that was made very reluctantly to protect the state government and the YDP Agong from embarrassment", he said, adding that it was also to avoid a negative impact on the Malaysian bond market, globally.

Najib said Low was at that time portrayed as a very influential person with connections in the Middle East.

On the 1MDB operations, Najib said he was never directly involved in the management of the fund, nor the appointment of its senior management.

"I only dealt with the company chief executive,” he said.

Touching on SRC International, Najib said that it was established to look into additional power needs for the country following a proposal by the Economic Planning Unit (EPU) and the Finance Ministry, in line with the National Energy Policy.

On SRC International's RM4 billion loan application from the Retirement Fund Incorporated (KWAP), Najib said he had only provided support by writing ‘setuju’ (agree) on a letter – but that did not mean it was a final decision.

"It (was) still subject to review and processes by the officers. It (was) not a carte blanche approval", he said.

He also denied ordering government guarantees for SRC's loan to be sped up, and reiterated that he had no interest in the company.

On SRC's funds being channelled abroad, Najib said he did not know the details, as such matters were decided by the board of directors.

"As prime minister and finance minister, I assumed the (chair of the) board of directors of all MoF Inc companies based on the best interest of their businesses and investments", he said.

Najib will continue with his testimony tomorrow.

He is facing three counts of criminal breach of trust (CBT), and one count of abuse of power over funds amounting to RM42 million linked to SRC International.

He is also facing three money laundering charges over the same fund. He faces up to 20 years in jail and fine for the offences.