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SRC International was a ‘one-man show’ by Najib, prosecution tells appeals court

Ad hoc prosecutor V Sithambaram says Najib 'micro-managed' the company and was a 'shadow director' despite never being formally appointed to such a post.

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Former prime minister Najib Razak at the Court of Appeal in Putrajaya today. Photo: Bernama
Former prime minister Najib Razak at the Court of Appeal in Putrajaya today. Photo: Bernama

Ad hoc prosecutor V Sithambaram today described the SRC International board of directors (BoD) as “puppets dancing to Najib Razak’s tune”, saying the running of the company was a “one-man show” by the former prime minister.

“It was a one-man show… he kept everyone away and was in control of the SRC funds through the company’s CEO Nik Faisal Ariff Kamil.

“Najib micro-managed the company to the extent of deciding on the appointment of SRC lawyers, auditors and which banks operated its accounts, functions usually carried out by the directors.

“The appellant’s unique position in SRC, since its incorporation and subsequent conversion to an MoF Inc company, clearly proves that the appellant was not merely acting in an official capacity as part of the government mechanism.

“The appellant’s control and dominion over SRC is evident from the fact that he had acted in his own name and not in the name of a principal, when he himself signed all the shareholder instructions that were subsequently executed by the SRC BoD,” he said.

At the time in question, Najib was prime minister, finance minister and adviser emeritus of SRC International which was later placed under the Ministry of Finance Incorporated (MoF).

Sithambaram made his submission before a three-member bench led by judge Abdul Karim Abdul Jalil in the hearing of Najib’s appeal against his conviction and jail sentence for the misappropriation of RM42 million in SRC International funds.

The other two judges on the bench were Has Zanah Mehat and Vazeer Alam Mydin Meera.

The Penang-based veteran criminal lawyer said that the appellant, although not a formally appointed director, was in fact the shadow director of SRC International by virtue of the fact that the company’s BoD was accustomed to acting on his instructions.

“It is pertinent to note that in any company, the shareholders appoint the BoD to manage the affairs and day-to-day running of the company which it shall do in the best interests of the company.

“However, in the case of SRC International, the situation was reversed as the shareholder was instructing the SRC BoD through the shareholder minutes on operational, business aspects which are within the purview of the SRC BoD.

“Former SRC chairman Ismee Ismail and former SRC director Suboh Md Yassin confirmed that the BoD had to follow the instructions from the appellant and execute them. Thus, the real shareholder of SRC was indeed the appellant,” Sithambaram said.

“It is clearly evident from the shareholder minutes that, instead of allowing the SRC BoD to conduct the affairs of SRC, the appellant took charge of the company and gave specific instructions to divert the funds of SRC overseas, via Dubai, Hong Kong and Switzerland.

“The purpose of the utilisation of these funds overseas had nothing to do with the purpose for which SRC obtained the funds from the Retirement Fund Incorporated (KWAP), namely for natural resources development,” he added.

Sithambaram said Najib had acted solely for his personal benefit as SRC International did not utilise the RM4 billion loan from KWAP for the purpose for which it was granted and had nothing to show for it, as confirmed by the 45th prosecution witness, former treasury secretary-general Wan Abdul Aziz Wan Abdullah.

“The evidence of PW45 did not show a single project that was undertaken or completed by SRC by utilising the RM4 billion loan given to it. The money just disappeared,” he said.

The Kuala Lumpur High Court on July 28 last year sentenced Najib to 12 years’ jail and fined him RM210 million after finding him guilty on seven charges of criminal breach of trust, money laundering and abuse of position involving RM42 million in SRC International funds.

The hearing of the appeal continues.