SRC's loan applications to KWAP were made before its directors were appointed

KUALA LUMPUR: The High Court was told that proposals to obtain a RM3.95bil loan from the Retirement Fund Inc (KWAP) by SRC International Sdn Bhd were made before the company directors were formally appointed.

Attorney General Tan Sri Tommy Thomas made the assertion through seven documents during the cross-examination of Datuk Seri Najib Razak in the SRC International Sdn Bhd trial here on Wednesday (Dec 11).

Thomas had referred Najib to seven documents relating to the appointment of seven SRC directors, Memorandum & Articles of Association (M&A), as well as letters and emails on the two loan applications by SRC to KWAP.

Based on the documents, the AG suggested that SRC made the decision to apply for loans from KWAP in June and July, 2011, while the board of directors were elected in August, the same year.

Najib replied that August was the month the directors were officially appointed.

"Their names may have been proposed for the board of directors. I have to check but the official appointment was on Aug 1," the Pekan MP said.

Thomas: You repeatedly said your role in SRC was as the advisor emeritus. That is your standard answer where all decisions by SRC was made upon the advice of the SRC board of advisors. You remember?

Najib: Yes.

Thomas: How could you have received such advice relating to these seven documents when the board of directors were non-existent?

Najib: It was forwarded by the (1MDB) CEO (Datuk Shahrol Azral Ibrahim Halmi) at that time.

Thomas: I put it to you that all these decisions were made without any board of directors and solely by you.

Najib: I disagree.

Najib also admitted that the proposal for a government guarantee for SRC's RM2bil loan to the Cabinet in 2011 was hastened.

He said this was due to investment opportunities awaiting the company in line with SRC's establishment for national interest.

Thomas then asked Najib why the loan applications from SRC to KWAP were rushed.

"I put it to you it (the loan) was rushed as though it was important. Why is that," said Thomas.

Najib said that SRC was set up as a national strategy and it was supported by the Economic Planning Unit (EOU).

He added that the company had investment opportunities, saying that this is why SRC's funding had to be approved.

"This is nothing out of the ordinary for any company that is set up in a short amount of time," he added.

Najib is facing seven charges – three for criminal breach of trust, one for abuse of power and three for money laundering - involving SRC funds totalling RM42mil.

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