SRC trial: Witness says govt still servicing RM4bil KWAP loan

KUALA LUMPUR: The Federal Government is still servicing the RM4bil loan taken by SRC International Sdn Bhd from Retirement Fund Inc (KWAP) due to the company’s failure to pay its debt.

The High Court heard testimony from Finance Ministry strategic investments division deputy secretary Afidah Azwa Abdul Aziz who said the government, as the guarantor of the loan, had to be responsible in paying back the principal loan and its interest to KWAP.

“Based on the agreement between SRC International and KWAP, the loan would be settled in 2022, which is 10 years from the year the loan was disbursed in 2012,” she said here Wednesday (June 19).

The witness was reading from her witness statement at the corruption trial of former prime minister Datuk Seri Najib Razak, who faces seven charges relating to misappropriation of RM42mil in SRC funds.

Afidah, who was attached to ministry’s government guarantee unit, said in her experience, the government would service loans when a government guarantee had been given.

“For projects apart from SRC International, usually the Finance Ministry would be prepared earlier because the ministry would have to finance infrastructure projects that could not generate enough profit to pay its debts, especially during the construction period.

“But for SRC International, its loan was for the purpose of investments which it should have gained profits from.

“The government was not prepared from the aspect of allocation to pay back the loan to KWAP because SRC was late in informing the government of its failure to finance the debt,” she said.

As of May this year, the witness said the balance from the interest and principal loan taken up by SRC from KWAP – which is currently financed by the government – stood at RM4.15bil.

Najib, 66, is charged with three counts of criminal breach of trust, one count of abusing his position and three counts of money laundering involving SRC funds amounting to RM42mil.

The hearing continues before Justice Mohd Nazlan Mohd Ghazali this afternoon.