Najib’s 1MDB trial: CEO’s fiduciary duty still a hot topic in cross-examination

KUALA LUMPUR: The fiduciary duty of a CEO was still a hot topic in the cross-examination of key witness Datuk Shahrol Azral Ibrahim Halmi in the 1Malaysia Development Bhd (1MDB) trial.

The 49-year-old admittedly said it was his mistake to “listen” to Datuk Seri Najib Razak in matters relating to the sovereign wealth fund.

The witness was earlier told by Najib’s lead counsel Tan Sri Muhammad Shafee Abdullah that he did not have a fiduciary duty to the former prime minister during the cross-examination here on Tuesday (Oct 29).

Shafee: You don’t have a fiduciary duty to Najib vis-a-vis 1MDB.

Shahrol: That was not what happened.

Shafee: I don’t care what happened. Anyone can say “I feel oppressed” that they have do it. I ask you, do you have a fiduciary duty to Najib vis-a-vis 1MDB?

Shahrol: I do.

The lawyer then repeated similar questions, to which the witness maintained his answer, that he had a fiduciary duty to Najib.

Shafee then suggested that the witness was not aware of one’s fiduciary duty was owed to the company and not even the board.

“This is the law, ” Shafee said.

The witness retorted and asked if Shafee could show him the legal provision, and after

going back and forth on the meaning of fiduciary, Shahrol then admitted that he was not aware that it was owed to the company and not a person.

Shafee: (Addressing the judge) He (referring to Shahrol) does not know his fundamentals. His fiduciary duty is only owed to the company.

(Addressing Shahrol) Because you don’t understand the basic concept of company law, you have messed up your line of duty.

Shahrol: I was wrong in considering that I should listen to Najib in all matters relating to 1MDB.

Shafee then asked Shahrol if Najib had ever asked him to only listen to the board of advisers and not report to the board of directors.

"No, he never did. If I may add, he also never said ‘Shahrol listen to the board only, don’t listen to me’, ” Shahrol said.

Last Thursday (Oct 24), Shahrol and Shafee got into a war of words over his fiduciary duty to the company where Shahrol said his fiduciary duty involved the finances of the company.

Najib, 66, faces 25 charges in total - four for abuse of power that allegedly brought him financial benefit to the tune of RM2.3bil; and 21 for money laundering involving the same amount of money.

The hearing before Justice Collin Lawrence Sequerah continues Tuesday afternoon.