SRC trial: Najib said unaware of SRC International’s initial RM3.95b loan application plan to KWAP

Former prime minister Datuk Seri Najib Razak walks past the media scrum at the Kuala Lumpur Courts Complex December 3, 2019. — Picture by Yusof Mat Isa
Former prime minister Datuk Seri Najib Razak walks past the media scrum at the Kuala Lumpur Courts Complex December 3, 2019. — Picture by Yusof Mat Isa

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KUALA LUMPUR, Dec 3 — Datuk Seri Najib Razak said he was unaware of SRC International Sdn Bhd’s initial plan to apply for a RM3.95 billion loan from the Retirement Fund Incorporated (KWAP) in 2011, while testifying at the High Court today. 

Testifying as the first defence witness in his RM42 million SRC International corruption trial, Najib said he was also not informed that the SRC International letter would be addressed to him. 

“I either met with Shahrol Azral or Nik Faisal or both of them between the establishment date of SRC until the date of the letter whereby during the meeting, I was informed of the proposed initiative by SRC. 

“It is highly likely that I was informed of this matter prior to receiving the said letter. I cannot remember specifically what was the initiative discussed but I am sure it was something substantive when I gave my support to SRC,” he said in his witness statement. 

It was previously revealed in court that the June 3, 2011 letter was signed off by SRC International director Nik Faisal Ariff Kamil, with the letter addressed to Najib as the prime minister and finance minister then.

The letter detailed SRC International’s plan to apply for a RM3.95 billion loan from KWAP for the purpose of working capital and general investment.

Najib also said it was very likely the letter had been sent to his office, with his late special officer Datuk Azlin Alias usually tending to such matters.

“I presume the letter was addressed to me because according to the first paragraph of the letter, it is stated that the operations of SRC will be conducted under my advice. 

“I actually do not know why it was sent to me because I was not informed beforehand,” he added.  

On his handwritten note of approval on the letter addressed to former KWAP chief executive Datuk Azian Mohd Noh, Najib said the word ‘bersetuju’ or agreed upon was not absolute as it was subjected to scrutiny by officers who may at times give differing views.

He also denied instructing Azlin to meet with Azian in a hotel after office hours on the matter of SRC International’s letter and its loan application, stating that this was probably something arranged between the two of them. 

Prosecution witnesses previously told the court that KWAP’s Fixed Income Department initially only wanted to loan RM1 billion to SRC International, citing risks of overconcentration as it felt that the requested RM3.95 billion was a large investment for one company in the industry.

On expediting the loan application process

Najib also admitted that he had asked KWAP to expedite its decision on its borrowing to SRC International in order for the former 1Malaysia Development Berhad (1MDB) unit to move forward and begin its intended operations.

Following KWAP’s decision to provide a revised loan figure of RM2 billion to SRC International and Najib’s remark on it being sufficient during a meeting with then KWAP board chairman Tan Sri Wan Abdul Aziz Wan Abdullah in 2011, Najib then questioned how the meet was interpreted as an order. 

“Referring to KWAP’s discussion on July 19, 2011, I find that the Investment Panel never agreed to give a RM2 billion loan. 

“It is a glaring intellectual dishonesty to equate the power to ‘hire and fire’ with the power to order KWAP’s Investment Panel to blindly obey my instructions. 

“As stated in Tan Sri Wan’s statement, the Investment Panel would decide based on the application’s merit regardless of any application put forth,” Najib said.

Wan Abdul Aziz who was at that time the Treasury secretary-general, previously testified that Najib instructed him to expedite the loan in a meeting that same year where only the two of them were present. 

Wan Abdul Aziz also in his testimony said KWAP Investment Panel would have maintained the approval of a RM1 billion loan only if there was no communication with Najib in the 2011 meeting. 

Najib also said he could not remember if there was a meeting between him and SRC International on the revised RM2 billion loan amount but conceded that it was made known to him as it would not make sense for him to remark on its adequacy.

Of the seven charges he was asked to enter his defence, Najib is accused of committing three counts of criminal breach of trust over a total RM42 million of SRC International funds while entrusted with its control as the prime minister and finance minister then, and a separate charge of abusing the same positions for self-gratification of the same sum.

For the remaining three charges, he is accused of laundering RM42 million.

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