SRC appeal: Najib’s lawyer claims High Court erred in applying overly broad meaning of ‘director’

Former Prime Minister Datuk Seri Najib Tun Razak arriving at the Court of Appeal, Putrajaya on April 28,2021. — Picture by Miera Zulyana
Former Prime Minister Datuk Seri Najib Tun Razak arriving at the Court of Appeal, Putrajaya on April 28,2021. — Picture by Miera Zulyana

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PUTRAJAYA, April 28 — The High Court erred in its decision to convict Datuk Seri Najib Razak of criminal breach of trust (CBT) by adopting a definition of “director” that was outside the scope provided in the Penal Code, the Court of Appeal heard today.

Najib’s lawyer Tan Sri Muhammad Shafee Abdullah said this during the closing submission in the hearing of Najib’s appeal against the former prime minister’s conviction and jail sentence for misappropriation of RM42 million SRC International Sdn Bhd funds.

In his submission, Muhammad Shafee said trial judge Mohd Nazlan Mohd Ghazali misdirected himself by adopting a definition of “director” that was beyond the natural and ordinary meaning of Section 402A of the Penal Code in the three CBT charges against Najib.

He pointed out that the judge had cited United Kingdom’s civil law and common law concepts of “shadow director” that was identical to the definition provided under the Companies Act to convict Najib, despite having earlier rightfully recognised the opposing definition differences as provided in the Penal Code.

“The appellant submits that the trial judge committed a grave error by relying on the common law and stretching the language of Section 402A of the Penal Code beyond the natural and ordinary meaning of the provision.

“This has caused serious prejudice and injustice to the appellant,” Shafee said of the High Court judge’s importation on the concept of “shadow director” into the definition of “director” in Section 402A of the Penal Code.

Under the section, a “director” includes any person occupying the position of director of a company, by whatever name called, and includes a person who acts or issues directions or instructions in a manner in which directors of a company are accustomed to issue or act, and includes an alternate or substitute director, notwithstanding any defect in the appointment or qualification of such person.

As for Section 4 of the Companies Act, “director” includes any person occupying the position of director of a corporation by whatever name called and includes a person in accordance with whose directions or instructions the directors of a corporation are accustomed to act and an alternate or substitute director.

On that grounds, Shafee said Najib could not be an “insider” in SRC International since he did not occupy any “director” positions, which also meant that he could not have come into possession or control of the company’s assets of which he was entrusted with.

During the appeal hearing, the prosecution led by ad hoc prosecutor Datuk Seri V Sithambaram contended that Najib was a “puppeteer” in absolute control of the “puppets” on the company’s board who had to execute his instructions.

Sithambaram in his rebuttal said Najib’s acts clearly brought him within the ambit of the definition of a director and that the latter was effectively a “shadow director” in how he conducted himself in relation to SRC’s affairs.

In the RM42 million SRC International case, Najib was sentenced by the High Court to 10 years’ jail on each of the three counts of CBT and each of the three counts of money laundering, and 12 years’ jail and a RM210 million fine, in default five years’ jail, in the case of abuse of position on July 28 last year.

However, Najib will only serve 12 years in jail as the judge ordered all the jail sentences to run concurrently which he is now appealing against.

The appeal hearing before Court of Appeal judge Datuk Abdul Karim Abdul Jalil who chaired a three-member panel alongside Datuk Has Zanah Mehat and Datuk Vazeer Alam Mydin Meera continues.

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