Tuesday, July 5, 2022

Najib, 4 others told to respond to SRC suit on RM4 billion KWAP loan

SRC International meanwhile must file its reply to their defence by Sept 30.

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The Kuala Lumpur High Court today ordered Najib Razak and four other defendants to respond to a suit filed by SRC International Sdn Bhd for alleged breach of trust and breach of statutory duty in relation to the RM4 billion Retirement Fund Inc (KWAP) loan to SRC by Aug 30.

The four were former SRC directors Suboh Md Yassin, Nik Faisal Ariff Kamil, Mohammed Azhar Osman and Che Abdullah @ Rashidi Che Omar.

Lawyer Muhammad Farhan Muhammad Shafee who appeared for the former prime minister said the court had ordered the defendants to file their statements of defence by the end of the month.

“The court also ordered the plaintiff (SRC) to file its reply to their defence by Sept 30.

“Oct 4 was set for next case management,” he told reporters after case management today, which was conducted online before judge Ahmad Fairuz Zainol Abidin.

He said in the meantime, SRC was preparing a substituted service application to serve the writ of summons against Nik Faisal since he is unreachable and out of jurisdiction, that is out of the country.

On May 7, SRC under its new management filed legal action against Najib and its former directors Suboh, Mohammed Azhar, Nik Faisal, Shahrol Azral Ibrahim Halmi, Ismee Ismail and Che Abdullah.

However, on July 22 it removed Ismee and Shahrol from the suit, retaining the others as defendants.

SRC, which is a subsidiary of 1MDB, in the writ of summons alleged that the defendants had conspired and committed breach of trust. It also claimed that the former prime minister had abused his power and obtained personal benefits from SRC funds in addition to misappropriating the funds.

Najib was the adviser emeritus of SRC from May 1, 2012 to March 4, 2019.

SRC, which is now wholly owned by the Ministry of Finance Incorporated (MoF Inc), is seeking a declaration that the defendants are liable for the loss of investment funds as a result of the use of the loan amount. It is also claiming general damages, exemplary, additional and interest, costs and other appropriate relief provided by the court.

SRC, in its writ of summons, said that in January 2019, the company was placed under the care of officials from the finance ministry (new management) and, after scrutinising and reviewing SRC records, found that SRC’s previous directors had not taken reasonable steps to ensure KWAP’s loans amounting to RM4 billion to SRC in 2011 and 2012 were used properly to finance the company’s general investment activities and general working capital requirements.

The company claimed that the previous directors did not monitor the disposal of RM3.6 billion to SRC BVI (proposed investment fund) allegedly for SRC to undertake investment activities in the energy resource sector overseas, and had failed to monitor the government’s exposure to guarantees given to SRC or to inquire about the misappropriation of SRC funds.

“The new management also found that a large number of withdrawals, transfers and use of KWAP loans were fraudulent or wrong,” the company said in its writ of summons.

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