PUTRAJAYA: Datuk Seri Najib Razak had failed to protect pensioners’ savings when a RM4bil loan from the Retirement Fund Inc (KWAP) was given to SRC International Sdn Bhd, a company which he was said to have personal interest in, the Court of Appeal heard.
Ad hoc prosecutor Datuk V. Sithambaram told a three-man bench of the appellate court that SRC International, a subsidiary of troubled sovereign wealth fund 1Malaysia Development Bhd (1MDB), was established with the support of Najib.
He was submitting at the hearing of an appeal filed by Najib against his conviction and sentence in the SRC International case here yesterday.
In his submission, Sithambaram said SRC International had sought a RM3bil grant from the government through the Economic Planning Unit (EPU) but failed.
Subsequently it approached KWAP, an entity that came within the control and direction of Najib who was the then finance minister, in order to secure funds for the benefit of SRC International.
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 had direct and dire consequences on the pensioners, 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, ” the prosecutor added.
The prosecution also 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 added that 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 said.
The court also heard that Najib had abused his position when he sat in Cabinet meetings to approve two government guarantees (GGs) for a RM4bil loan from KWAP.
Sithambaram said Najib participated in Cabinet meetings on Aug 17,2011, and Feb 8,2012, to approve the GGs 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 in obtaining the gratification.
“The offence is complete the minute the appellant sits in the Cabinet with an interest, ” he said.
“His presence and involvement during those meetings had precipitated the approval of both the GGs.”
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 three counts of criminal breach of trust 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 today.