KUALA LUMPUR, Aug 3 — The High Court’s verdict in convicting and sentencing Datuk Seri Najib Razak for the misappropriation of SRC International Sdn Bhd funds totalling RM42 million last week was unprecedented in Malaysian history.
In a proceeding which lasted several hours, the former prime minister was convicted and found guilty on all seven charges of misappropriating RM42 million from SRC International Sdn Bhd by the High Court after a trial which lasted a total of 95 days.
The former prime minister was subsequently sentenced to 12 years’ imprisonment and a RM210 million fine. The sentence has been stayed pending appeal.
Here is a simplified version of High Court judge Mohd Nazlan Mohd Ghazali’s two-hour-long judgment of the seven charges Najib was convicted for that was sighted by Malay Mail.
The abuse of power charge
In his judgment, Mohd Nazlan said it was clearly established by evidence that the accused had a personal and private interest in SRC International, a finding which remained unrebutted by the defence.
“In my evaluation, despite the matter being in the 10th Malaysia Plan, the impetus for the proposal to actually initiate what was embedded in the plan came from someone associated with 1MDB, not the Government.
“Even if the accused was not singularly responsible for the setting up of SRC, the more pertinent point is that the approval for the establishment of SRC by the accused provided the true starting point for the involvement of the accused in the company,” he said, adding that it was patently clear that the idea or proposal did not originate from a government agency or ministry.
Mohd Nazlan also emphasised that Najib had an interest in SRC International as he participated in the Cabinet meetings which approved the company’s application for the government guarantees.
“And the said decision to approve directly put the accused in a position that had access to more funds of SRC.
“The gratification in terms of the advantage immediately became an entitlement of the accused, only for him to decide as and when it was essential for such funds to be channelled for his own use,” he said.
Mohd Nazlan said the accused’s participation in the Cabinet meetings which approved the government guarantees for the RM4 billion financing to SRC International from Retirement Fund Incorporated (KWAP) directly caused the accused to be in a position of access to much greater funds of the company — at any time and as and when he deemed necessary — including to the RM42 million that flowed into his accounts in late 2014 and early 2015.
The judge further said the reason for the participation was precisely the motivation for the intention to have access to much larger funds in SRC International, which included the RM42 million.
Mohd Nazlan also pointed out the inconsistencies of Najib’s conduct subsequent to the release of the entire RM4 billion loan to SRC International with his involvement prior to.
“The cross-examination of the accused revealed in clear fashion a number of conclusions that do little to bolster his defence.
“First, there is no evidence that shows that the accused was even concerned with the use of the funds loaned to SRC by KWAP, both in terms of the fact that the monies was sourced from the country’s retirement pension fund, hence part of the public funds, as well as whether the pursuit of promoting the national energy strategic initiatives was anywhere closer to be met.
“The accused’s lack of action to recover the funds stated to be frozen by the Swiss authorities for alleged money laundering is therefore very puzzling and is instead much more consistent with the conduct of one who did not want the problem resolved given his own complicity in the unlawful transfer of the funds in the first place, as evidenced in the shareholder minutes of MOF Inc. notwithstanding his claim that these minutes were not genuine,” he said.
He also stated how Najib had disagreed with the assertion that the RM4 billion had since disappeared and was lost.
“Never mind the accused himself offered no evidence to show that he had taken any steps to ascertain what exactly has happened to the said funds,” he added.
The judge also said Najib could not provide a clear answer to the question whether he was satisfied with the progress of SRC International after the first drawdown of the RM2 billion before agreeing to support the second RM2 billion loan.
Najib had in his testimony claimed he did ask and was told that the monies had been set aside for immediate investment requirements but did not inquire whether the loan remained in cash.
“Again, I find this hard to fathom when the source of the funding was the pensions fund and the sum involved was extremely large by any measure,” Mohd Nazlan added.
The three criminal breach of trust charges
The judge also pointed out how Najib — as then finance minister and legal owner of SRC International under MoF Inc — did not take the logical step of returning the RM42 million to the company even after he was informed of it nor take any immediate action to inquire or clear his name.
“But in cross-examination despite repeated questioning, he maintained he did not return the same because investigations were pending.
“This is unconvincing since given the doubts, he should have at least offered to set RM42 million aside for a possible return to SRC or as the authorities might determine. That did not happen.
“His failure to articulate an intention to repay the same, let alone actually returning the RM42 million is difficult to countenance,” Mohd Nazlan added.
On Najib not being involved in the RM42 million transactions into his accounts, Mohd Nazlan said there has never been any allegation of wrongful debit of monies out of SRC International and its subsidiary Gandingan Mentari Sdn Bhd.
“Evidence has been led that Nik Faisal had always been the highest-ranking executive in SRC. He was at the same time the mandate holder of the accused’s personal accounts.
“Although removed as the CEO of SRC for governance issues, Nik Faisal continued to be a member of the board of directors and more importantly remained a signatory of the SRC and GMSB funds, as well as the mandate holder of the accused’s personal accounts,” he said.
He added the inference was that Nik Faisal’s signature was necessary to effect the fund transfer including as directed by the accused of RM42 million.
Mohd Nazlan stated that the totality of the evidence was more consistent with the version that Najib knew about these transactions but deliberately wanted him insulated from the efforts taken to prevent any risk of public disclosure.
“I reiterate that the accused was the owner of these accounts. He tasked the three to manage his accounts. He spent monies out of these accounts. Any alleged reactive course of conduct or subterfuge was at all times undertaken to ensure there was sufficient funds for use by the accused.
“There is no basis to the submission that these were done to avoid the accused knowing the true details of the transactions in his or other accounts. Nor could the accused, when cross-examined, offer a reason why they would want to conceal the RM42 million remittance from him in his long testimony.
“The fact remains that, as confirmed again by the testimony of the accused, that Jho Low and Datuk Azlin, apart from Nik Faisal the official mandate holder, did have contact with the accused on his accounts.
“The inference is therefore inescapable as it is overwhelming — that they or any one of them must have informed the accused about the balances of the accounts, including the remittance of RM42 million into two of the accounts, so that the accused would be well informed on his issuance of personal cheques out of those accounts,” he said.
The three money-laundering charges
Mohd Nazlan in his judgment said Najib had chosen willful blindness as prevailing circumstances and gave rise to a considerable degree of suspicion in that it must have been patently obvious to Najib that the funds could not have originated from King Abdullah.
“The circumstances which in this case so patently aroused suspicions in an overwhelming fashion lead only to the irresistible conclusion that the accused deliberately chose not to question and probe substantive questions that plainly required verification, so that he could deny knowledge. This is wilful blindness.
“In the instant case, however the accused took not a single step to investigate in order to find out the truth of the matter.
“The accused’s defence that he honestly believed that the funds remitted into his accounts were donations from King Abdullah is nothing but an implausible concoction,” he said in the judgment.
He then emphasised the facts and evidence of this case as relevant to the dishonest intention and knowledge for the CBT charges also warrant the inference that Najib knew that the RM42 million that followed into his accounts were from SRC International.