KUALA LUMPUR, June 11 — Datuk Seri Najib Razak added a clause in the constitution of SRC International Sdn Bhd at an extraordinary general meeting (EGM) to make him the ‘adviser emeritus’ of the company, the High Court heard today.
Former SRC International director Tan Sri Ismee Ismail said the amendment which indirectly gave Najib control of the company, was made known in the shareholders’ minutes of April 23, 2012 which the latter had signed on a letter addressed to the board.
“The minutes said Article 117 was added in the Memorandum and Articles of Association of SRC International.
“It said the prime minister was made adviser emeritus of SRC International and shall advise the board and it would give due consideration and implement any advice of the adviser emeritus in the best interest of the company,” he said during the prosecution’s examination-in-chief, referring to Najib.
SRC International was a wholly-owned subsidiary of 1Malaysia Development Berhad (1MDB), which came under the purview of the Minister of Finance Incorporated (MoF Inc).
Ismee revealed that SRC International chief executive and managing director Nik Faisal Ariff Kamil had disclosed the amendments during a board meeting on June 8, 2012.
When asked about the implication of the amendment to the company, Ismee said the adviser emeritus’ views would have to be taken into account in material and strategic issues on the company.
“At the time, the adviser emeritus is Najib,” he said, adding that Najib as the sole shareholder had control over SRC International.
He also previously testified that only Nik Faisal has the exclusive link between the company’s board of directors and Najib who was its adviser emeritus.
Ismee, who was appointed as director in August 2011, also said he resigned three years later after failing to accept Nik Faisal’s corporate practices and issues arising from the resolution to approve the unaudited SRC International’s account for 2013.
When cross-examined by Najib’s lawyer Harvinderjit Singh, Ismee conceded he had not seen Najib signing the minutes or met him when the EGM to pass an amendment to the company’s memorandum of association was held.
Ismee also told the court there was no meeting between Najib in his capacity as adviser emeritus and the SRC board of directors from 2011 to 2014.
“Whatever advice came through SRC International chief executive and managing director Nik Faisal Ariff Kamil,” he said.
Ismee also acknowledged Harvinderjit’s suggestion that the appointment of SRC directors did not need the prime minister’s approval, adding that the power to appoint directors of SRC lies with the company’s board.
However, he insisted that the board’s decision to appoint directors was still subject to the prime minister’s approval.
He also pointed out that apart from Article 117, Najib had control over the board and management as Article 67 states that the appointment and removal of directors shall not be formalised without the written approval of the prime minister.
Later when asked to recall as to how the amendment proposal to Article 117 came about, Ismee said he could not remember but suggested it could have come from a shareholders’ resolution.
Harvinderjit: Was it something communicated through the board from the prime minister or originated from the management?
Ismee: I think there was a shareholders’ resolution to that effect.
Ismee is the 39th prosecution witness of Najib’s ongoing trial involving seven charges of abuse of position, criminal breach of trust and money-laundering over RM42 million of SRC International’s funds.
During the course of the trial, witnesses have testified that the Retirement Fund Incorporated (KWAP) gave a total of RM4 billion in loans in 2011 and 2012 to SRC International, with money allegedly flowing through other companies before being transferred into Najib’s accounts.
The trial before High Court judge Mohd Nazlan Mohd Ghazali will resume at 9am tomorrow, with Ismee expected to continue testifying.