KUALA LUMPUR, June 18 — Datuk Seri Najib Razak’s Cabinet had approved SRC International’s Sdn Bhd initial RM2 billion loan from the Retirement Fund Incorporated (KWAP) with government guarantees without any formal discussions or objections in August 2011, the High Court was told today.
Former deputy chief secretary to the federal government Tan Sri Mazidah Abdul Majid, testified that Najib had sought approvals from the Barisan Nasional (BN) ministers during an August 17, 2011 Cabinet meeting over the granting of government guarantees on the SRC International loan applications.
“Based on the minutes of the Cabinet meeting then, there was no discussion among the ministers.
“Any Cabinet discussions will be dictated in the minutes to show that the Cabinet has acknowledged the matter or views presented which the August 17, 2011 minute lacked,” she said in her testimony.
Among the ministers in that Cabinet who are now with Pakatan Harapan are Home Minister Tan Sri Muhyiddin Yassin, Sabah chief minister Datuk Sri Mohd Shafie Apdal, and Tan Sri Rais Yatim.
She explained that the memorandum dated August 17, 2011 was put forth by the prime minister, who was Najib at that time.
“The memorandum recommended to the Cabinet to consider and agree to providing guarantees to SRC International to obtained a loan of up to RM2 billion sourced from domestic financial institutions.
“The 10-year loan period was for SRC International, a wholly-owned subsidiary of 1Malaysia Development Berhad (1MDB) to fund its investment activities in the natural resources sector.
“The memorandum also sought the Cabinet’s approval to give tax and duty stamp exemptions to SRC International while allowing the finance minister to decide on the loan’s terms,” she said.
Later Mazidah also testified that the Cabinet once again adopted another memorandum during a February 8, 2012 Cabinet meeting over the granting of government guarantees on the second SRC International loan application totaling RM2 billion from KWAP.
However, similar to the first Cabinet memorandum on SRC International’s RM2 billion loan in August 2011, Mazidah confirmed there no discussion was recorded during the Cabinet meeting.
“There was no discussion during the Cabinet meeting (which took place on Feb 8, 2012).
“If there had been a discussion, the minutes would have mentioned it,” Mazidah said.
She added that the backgrounds of 1MDB and SRC International as well as the implications to the government guarantees and recommendations were mentioned in the memorandum dated February 8, 2012.
According to her testimony, Najib, who was finance minister, had chaired both meetings as chairman at the Prime Minister’s Office in Putrajaya.
As finance minister, Najib oversaw KWAP and also the Minister of Finance Incorporated (MOF Inc) who was the sole shareholder of SRC International’s parent company 1MDB.
During the course of the trial, witnesses have testified that KWAP granted a total of RM4 billion in loans in August 2011 and March 2012 to SRC International, with money allegedly flowing through other companies before being transferred into Najib’s accounts.
Mazidah is the 40th 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.
The trial before High Court Mohd Nazlan Mohd Ghazali resumes at 9am tomorrow.