SRC trial: Former director says questioned ex-CEO Nik Faisal over firm’s practices

KUALA LUMPUR, June 10 — Former SRC International director Tan Sri Ismee Ismail said he expressed concerns about the firm’s corporate governance and financial practices to former chief executive Nik Faisal Ariff Kamil, the High Court heard today.

Testifying in former prime minister Datuk Seri Najib Razak’s trial, Ismee said that Nik Faisal would seek to allay these by saying the firm had already dealt with the issues.

“Concerning daily operations of SRC International, I had also raised questions on issues of SRC’s governance.

“Nik Faisal would usually reply saying the matter in question had already been discussed and was approved by the ‘government’.

“In my opinion, the ‘government’ he mentioned was actually referring to Datuk Seri Najib,” he said when reading out his statement before Judge Mohd Nazlan Mohd Ghazali.

Ismee, who was appointed as director in August 2011, said he resigned three years later after failing to accept Nik Faisal’s corporate practices.

“I resigned because I did not subscribe to the style of management that was being practised by its CEO Nik Faisal especially concerning the company’s accounts and finances,” he read from his statement during examination in chief by deputy public prosecutor Datuk Ishak Mohd Yusoff.

These practices include Nik Faisal being the exclusive link between the company’s board of directors and Najib who was its advisor emeritus.

When pressed further by Ishak as to why he decided to vacate his position at the company, Ismee explained among the issues he faced with the former CEO were the audit status of SRC International’s accounts in 2013.

“SRC had requested for all board members to approved (reports of) audited accounts in 2013, but unfortunately, we discovered the accounts that were approved had not been audited yet.

“So as one of the directors, I took the responsibility that the accounts be audited and closed, and then I decided to resign,” he elaborated.

Ismee also said that all board decisions had to be referred to Najib for his advice and consent.

“If there was anything that needed to be brought to the attention of Datuk Seri Najib, it would be carried out by Nik Faisal because only he functioned as the direct link between the SRC’s board of directors and Datuk Seri Najib,”

Ismee, the 39th witness at Najib’s RM42 million SRC International trial, said he took the arrangement to mean that all matters and discussions at SRC International would be communicated by Nik Faisal to Najib.

During the afternoon session, Ishak had gone through and verified with Ismee several SRC International directors’ meeting minutes throughout the time he served on the board of directors.

The latter had confirmed in several minutes that he chaired, that Najib as the Minister of Finance Incorporated, had undersigned the minutes that acknowledged his knowledge about the meetings.

Ismee explained how the first board meeting itself among SRC International directors, when it was still a 1Malaysia Development Berhad (1MDB) subsidiary, intentions to acquire a loan from the Retirement Fund (Incorporated) (KWAP) had been expressed by the management.

“The proposal was presented by SRC International’s management for us to accept a loan from KWAP with a government guarantee at the time, there was an order from a shareholder.

“At that time, it was 1MDB,” he answered Ishak when asked who the shareholders he referred to were.

Earlier, Najib’s lawyers Harvinderjit Singh and Tan Sri Muhammad Shafee Abdullah had questioned the authenticity of the minutes Ismee was made to verify in court, which were tendered in court for first time.

Harvinderjit had argued the photocopied documents were fake considering they were not the original copies, going on to argue it should not be accepted by the court as evidence.

High Court judge Mohd Nazlan then ruled the documents would need to be verified by the person who produced them or had seen the originals, first before it would be tendered in court as evidence.

These include company secretaries who handled the documents or investigating officers from the Malaysian Anti-Corruption Commission (MACC).

The trial, with Ismee still on the witness stand, will continue on Tuesday at 9am.