‘1MDB failed to secure RM3bil to set up SRC’

  • Nation
  • Friday, 03 May 2019

Serious discussion: Najib speaking with Muhammad Shafee (standing) at the Kuala Lumpur Courts Complex. — Bernama

KUALA LUMPUR: 1Malaysia Development Bhd (1MDB) had failed to secure a RM3bil grant from the Economic Planning Unit (EPU) in 2010 to set up its subsidiary SRC Inter­national Sdn Bhd, a witness testified.

The High Court heard that the state fund was instead given RM20mil as a launching grant to establish SRC International.

Datuk Dr Kamariah Noruddin, the former EPU deputy director-general (macro), said 1MDB’s request for the grant was communicated to the Finance Ministry via a letter dated Aug 27, 2010.

“Basically, the letter was an application for RM3bil to set up SRC, which was a special vehicle to maintain the strategic state, production, logistics and trading in key resource areas like oil and gas, coal and iron, among others,” she said yesterday.

The 28th witness was testifying in an examination-in-chief by deputy public prosecutor Mohd Ashrof Adrin Kamarul in the corruption trial of Datuk Seri Najib Razak, who is accused of misappropriating RM42mil in funds belonging to SRC International.

Kamariah, 61, said the application was difficult to process as it was “out of the ordinary”.

“It was an application by 1MDB to the (then) finance minister and prime minister (Najib), which was then forwarded to the EPU,” she said.

The EPU is a unit under the Prime Minister’s Office.

Kamariah said former 1MDB chief executive officer Datuk Shahrol Azral Ibrahim Halmi had signed the letter and that her then superior Datuk Noriah Ahmad had asked her to go through the application.

She said Noriah had also received a directive from former minister in the prime minister’s department Tan Sri Nor Mohamed Yak­cop to prepare comments for the application.

“I prepared a memo, which was addressed to Najib through Nor Mohamed and signed by Noriah,” she said.

Kamariah said EPU supported 1MDB’s proposal to start SRC International for the purpose of securing coal and uranium.

“However, we did not support oil and gas as it was already led by Petronas.

“For iron, steel and aluminium, it was proposed that we continue allowing the private sector to run it, so we did not support the RM3bil grant,” she said.

The witness said EPU assisted the setting up of SRC International with RM20mil.

“The launching grant was just to set up the company. Maybe they need to get the talent for them to do due diligence,” she added.

During cross-examination by Najib’s lead counsel Tan Sri Muhammad Shafee Abdullah, Kamariah agreed with the suggestion that Najib had concurred with the EPU comments.

Muhammad Shafee: He (Najib) also agreed to the RM20mil. He did not push anything further in relation to the RM3bil. He accepted the EPU memo without batting an eye.

Kamariah: Agreed.

Earlier, the court heard that Najib was paid RM1mil in a special golden handshake in his final month as a civil servant last May.

Witness Zarina Yusuf, who is the deputy chief accountant in the Prime Minister’s Department, testified that Najib’s last base salary was RM22,826.65 a month and that he also received a salary as an MP and other allowances.

Prior to May 2018, Najib’s gross income was RM58,605.15 a month.

In May 2018, he received a pro-rated base salary of RM6,627.09.

His last drawn salary for the month of May last year totalled RM1,017,014.39, which included allowances and the RM1mil special payout.

DPP Mohd Izzat Fauzan: Why was the amount reduced?

Zarina: It was pro-rated. He was the premier up till May 9, 2018.

DPP Mohd Izzat: There was a RM1mil special payment. What was this for?

Zarina: I am not sure, but it is in accordance with the law for prime ministers and former prime ministers.

The hearing continues before Justice Mohd Nazlan Mohd Ghazali on Monday.

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