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Free Malaysia Today
5 days ago
- Business
- Free Malaysia Today
SRC board, not Najib, responsible for company's funds, says ex-PM's lawyers
SRC International is suing ex-prime minister Najib Razak (left) and former CEO Nik Faisal Ariff Kamil for US$1.18 billion. KUALA LUMPUR : The High Court here was told today that SRC International Sdn Bhd's board and management had exclusive control of the company's operations and loan funds received from Retirement Fund Incorporated (KWAP). Lawyer Farhan Shafee Abdullah – representing former prime minister Najib Razak in SRC International's US$1.18 billion civil suit against him and former SRC CEO Nik Faisal Ariff Kamil – submitted that his client had no control over the company. Farhan said all transactions were carried out by the board, which also bore responsibility for overseeing the company's affairs. 'If any misappropriation occurred, it was the result of the board's own decisions. 'Even taking Najib's alleged instructions at their highest, responsibility ultimately rested with the board to properly manage the funds within those parameters,' he said. Farhan also dismissed SRC International's claim that Najib acted as a shadow director or the de facto controller of the company. He submitted that Najib was not part of the company's governing board and did not assume the fiduciary duties of a director. 'The evidence shows the SRC board exercised independent judgement and was not accustomed to act on Najib's instructions,' he said. Farhan added that SRC International had not produced any instance of Najib issuing a binding directive to the board on operational matters. He said the company's own witness, former BSI Bank wealth management head Kevin Swampillai, had testified that he did not receive, see or become aware of any instruction from Najib directing the transfer or investment of SRC International's funds. 'All instructions for the movement of funds came from Jho Low (Low Taek Jho) and SRC officers, including (former director) Suboh Yasin – not Najib. This is a striking admission from the plaintiff's own witness. 'Despite Najib's position, no directive from him was ever communicated to the bank handling the money,' he said. The hearing before Justice Ahmad Fairuz Zainol Abidin will continue at a later date. SRC International is suing Najib and Nik Faisal – who remains at large – for allegedly misappropriating company property and conspiring to convert it for their own use. Judgment in default of appearance has been entered against Nik Faisal. The suit originally included former SRC International chairman Ismee Ismail and former directors Suboh, Shahrol Azral Ibrahim Halmi, Azhar Osman Khairuddin and Che Abdullah @ Rashidi Che Omar as co-defendants. SRC International later dropped the case against them, but Najib named them as third parties in his defence. Najib is currently serving a jail sentence in Kajang prison for misappropriating RM42 million from SRC International.
Malay Mail
5 days ago
- Business
- Malay Mail
Najib denies liability in SRC US$1.1b suit, blames board for fund misuse
KUALA LUMPUR, July 8 — Former prime minister Datuk Seri Najib Razak played no role in approving or directing the transfer of SRC International Sdn Bhd's funds, his lawyer told the High Court today. Najib's counsel Muhammad Farhan Muhammad Shafee said Najib gave no operative instructions regarding the transfers of SRC International monies into specific fiduciary funds. Muhammad Farhan argued that, at best, Najib merely chose the financial institution, which at that time was known to be reputable. He said this in his submission at the close of the defendant's case in SRC International's US$1.18 billion civil suit against Najib and former SRC chief executive Nik Faisal Ariff Kamil, who is currently at large. 'If misappropriation occurred, it was due to the board's own decisions (or dereliction thereof) as even taking the purported instructions of the first defendant at its highest, he ultimately vested responsibility to the board to properly manage the funds (even if it were within the parameters of his directions).' Muhammad Farhan said the entire chain of events – from SRC International sending RM1.8 billion to SRC BVI to placing them in so-called intermediaries and later moving them to various entities linked to Malaysian businessman-turned-fugitive Jho Low – were carried out by former company chief executive Nik Faisal Ariff Kamil, Low, and former company director Datuk Suboh Md Yassin. 'The first defendant's name does not appear on any of the transactional documents authorising those movements.' 'If anything, Jho Low misrepresented having the first defendant's backing to persuade others, but no evidence shows the first defendant knowingly agreed to such misuse.' 'To take the plaintiff's narrative sets a dangerous precedent that anybody can use the name of the prime minister with impunity to get what they want and then unload all the liability on him,' Muhammad Farhan said. He said should the court hold Najib liable in any way, the directors – who actually controlled the funds and breached duties – should indemnify him because in equity they are primarily liable for the loss. 'To absolve them would set that 'dangerous precedent' we mentioned, encouraging directors of GLCs to abdicate responsibility whenever a higher official is involved,' he said. Imprisoned since 23 August 2022, Najib is serving a 12-year jail sentence and an RM210 million fine for his conviction over the misappropriation of RM42 million from SRC International, which has recently been reduced to six years of imprisonment and an RM50 million fine by the Pardons Board. SRC, under new management, sued Najib and several former directors — Suboh, Datuk Mohammed Azhar Osman Khairuddin, Nik Faisal, Datuk Che Abdullah @ Rashidi Che Omar, Datuk Shahrol Azral Ibrahim Halmi, and Tan Sri Ismee Ismail — in May 2021. However, five names were later removed from the suit, leaving Najib as the sole defendant. Additionally, Najib has named the former directors of SRC International as third-party respondents. SRC, as the plaintiff in the writ of summons, has alleged that Najib abused his power to obtain personal benefits from SRC International's funds and misappropriated these funds. Najib served as SRC's Emeritus Adviser from 1 May 2012 until 4 March 2019. Now wholly owned by the Ministry of Finance Incorporated (MoF Inc), SRC International is seeking general damages, exemplary damages, additional interest, costs, and other appropriate relief from the court. The company seeks a declaration that Najib is liable for the company's losses due to his breach of duties and trust. It is also seeking an order for Najib to pay US$1.18 billion in losses suffered, along with damages for breach of duties and trust, including an order for him to compensate the US$120 million that entered his bank account.
Free Malaysia Today
6 days ago
- Business
- Free Malaysia Today
Najib gave conflicting answers over source of funds, court told
SRC International is suing Najib Razak and former CEO Nik Faisal Ariff Kamil for wrongfully receiving company property, and dishonestly and wrongfully conspiring to convert company property for their own use. KUALA LUMPUR : A lawyer for SRC International Sdn Bhd told the High Court today that former prime minister Najib Razak gave conflicting answers when confronted about the source of money that entered into his accounts more than 10 years ago. Lead counsel Lim Chee Wee said Najib had, in his testimony under oath, given various versions of the source of funds that entered his accounts when cross-examined. Submitting at the close of the SRC International trial, Lim said Najib had, in an affidavit affirmed in 2015, claimed that a 'personal donation' of US$700 million and another sum of RM42 million originating from SRC International had been channelled into his account by Gandingan Mentari Sdn Bhd and Ihsan Perdana Sdn Bhd without his knowledge. 'He first said the affidavit was 'very badly drafted', and then he said the admission was based on 'allegations at that time'. 'He later said that he was 'misled' and backtracked to say it was the information he received. And another version was that he was misled by media reporting,' Lim said after the defence had closed its case. SRC International is suing Najib and former CEO Nik Faisal Ariff Kamil for wrongfully receiving company property, and dishonestly and wrongfully conspiring to convert company property for their own use. A judgment in default of appearance has been entered against Nik Faisal. The suit originally included former chairman Ismee Ismail, as well as former directors Suboh Yasin, Shahrol Azral Ibrahim Halmi, Azhar Osman Khairuddin and Che Abdullah @ Rashidi Che Omar, as co-defendants. SRC International later dropped the case against them. However, they were added as third parties by Najib. Lim also said Najib never informed his Cabinet about the RM42 million he allegedly received, and that he continued to helm decisions involving SRC International. 'It cannot be said that he was acting in the country's interest, or that his actions can be downplayed to mere recklessness,' he said. The hearing continues before Justice Ahmad Fairuz Zainol Abidin on Tuesday, with Najib's lawyer, Shafee Abdullah, submitting in his defence, followed by lawyers appearing for the various third parties.
