KUALA LUMPUR, Dec 4 — Datuk Seri Najib Razak said the SRC International Sdn Bhd board rarely asked for his advice and he did not habitually offer them any as the company’s “adviser emeritus”, the High Court heard today.
Testifying as the first defence witness in his RM42 million SRC International corruption trial, Najib said the board had sought his views on only two occasions.
These were about the National Strategic Coal Initiative and Trans Sabah Gas Pipeline Project during the leadership of group chief executive Datuk Mohammed Azhar Osman Khairuddin.
“Except on these two occasions, I was never asked to give any advice to the board.
“Once again, I am perplexed as to how the board of directors comprising highly qualified and experienced individuals can accept Nik Faisal’s word at face value,” he read from his witness statement.
According to former SRC International board chairman Tan Sri Ismee Ismail, Article 117 was added in the Memorandum and Articles of Association of SRC International and gave Najib indirect control of the company.
Ismee said it was made known by SRC International chief executive Nik Faisal Ariff Kamil during a board meeting on June 8, 2012.
Article 117 said the prime minister 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.
Today, Najib also denied he suggested or pressed for the inclusion of the clause to make him “adviser emeritus”.
He further argued that any advice he gave was also not binding.
“Any advice given is only for the board to consider. The board is not bound to obey any advice and must act in the best interest of the company,” he said in his testimony on the second day of his defence.
Najib added that this was also in line with basic legal principle within the company’s rule.
“I fail to see how this Article 117 could be said to have allowed me to control SRC when neither advice was sought by the board nor there was advice given in my capacity as adviser emeritus,” he said.
He also said he learned of the said amendment through his former special officer, the late Datuk Azlin Alias that Nik Faisal.
Najib also claimed that government-linked companies (GLC) should not blindly obey what is presented verbally to them as an order by the prime minister or the finance minister.
“Should the board obey without question what was relayed through the chief executive without any confirmation from the Finance Ministry or me personally, then it is clearly a dereliction of duties,” he said.
Najib said it was entirely preposterous to suggest that his power to “hire-and-fire” gave him control over SRC International’s board of directors, as suggested by former directors Ismee and Datuk Suboh Md Yasin.
He argued that the authority to remove a board member was no different than that of any majority shareholder.
“As I understand on principles of corporate governance, this did not take over the legislative obligation of directors to act in the best interest of the company.
“As I have mentioned the power within SRC and 1MDB vested in me as the prime minister is something very common when dealing with GLCs,” he said.
He said while unnecessary attention has been casted on this matter, there was no specific occasion which showed he as prime minister had fired any individuals in SRC International.
Najib was ordered to enter his defence to 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, three counts of laundering the RM42 million, and another charge of abusing the same positions for self-gratification the sum.