Najib failed to protect pensioners' savings, court hears

PUTRAJAYA: Datuk Seri Najib Razak had failed to protect pensioners' funds when a RM4bil loan from the Retirement Fund Inc (KWAP) was given to SRC International Sdn Bhd, a company he is said to have a personal interest in, the Court of Appeal heard.

Ad hoc prosecutor Datuk V. Sithambaram told the three-man bench that SRC International, a subsidiary of troubled sovereign wealth fund 1Malaysia Development Bhd (1MDB), was established with the support of Najib.

He said this during submissions at the appeal hearing for Najib against his conviction and sentence in the SRC International case here on Wednesday (April 14).

SRC International had sought a RM3bil grant from the government through the Economic Planning Unit (EPU) but failed.

SRC subsequently approached KWAP, an entity that was within the control and direction of Najib who was the then-finance minister.

Sithambaram said a witness testified that it would be negligent of the EPU to grant the RM3bil to a company that had not been formed then and could not show any return of investment.

"Strong words of rejection (were used) to the application for a RM3bil government grant by 1MDB to establish SRC," he added.

As KWAP is a pension fund for retirees in Malaysia, the misuse of the funds would have direct and dire consequences to pensioners' money, Sithambaram said.

"Hence caution should be exercised when inter-meddling with this fund. It is submitted that the appellant (Najib), as the prime minister and finance minister, failed to protect KWAP from a bad loan," he added.

The prosecution contended that it was clear that SRC International was incorporated at the behest of 1MDB and supported by Najib, who was named in his capacity as the prime minister in the company's memorandum of association since its inception.

Sithambaram said Najib had a "very powerful role" in SRC International that enabled him to use the company's funds for his personal use.

"This is taxpayers' money, pensioners' money – and he took it," the prosecutor added.

The court also heard that Najib had abused his position when he sat in Cabinet meetings to approve two government guarantees (GG) for a RM4bil loan from KWAP.

Sithambaram said Najib participated in Cabinet meetings on Aug 17,2011 and Feb 8,2012 to approve the GG from KWAP to SRC International.

He said the offence under Section 23 of the Malaysian Anti-Corruption Commission Act, which Najib was convicted with, did not depend on the receipt of the gratification but the use of the position to obtain the gratification.

"The offence is complete the minute the appellant sits in the Cabinet with an interest.

"His presence and involvement during those meetings had precipitated the approval of both the GG," Sithambaram said.

Najib's presence at the meetings led to the decision by the Cabinet to ultimately grant the two government guarantees for the loans, which would not have been approved by KWAP otherwise, Sithambaram said.

On July 28 last year, the Kuala Lumpur High Court sentenced Najib to 10 years' jail on each of the three counts of CBT as well as each of the three counts of money laundering.

Najib, 68, is currently out on bail of RM2mil in two sureties pending appeal.

The appeal hearing continues Thursday (April 15).

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