SRC was the victim of large-scale fraud, court told

KUALA LUMPUR: SRC International Sdn Bhd, a former subsidiary of 1Malaysia Development Bhd (1MDB), was the victim of a large-scale, multi-jurisdictional fraud orchestrated by former prime minister Datuk Seri Najib Razak, the High Court heard.

SRC's lawyer Datuk Lim Chee Wee said that instead of serving the rakyat, the company became a vehicle manipulated by Najib to procure a whopping RM4bil loan from the Retirement Fund Inc (KWAP) to enrich himself by at least US$120mil (RM567.7mil at current exchange rates), causing injury and loss to SRC and the rakyat of at least US$1.18bil (RM5.58bil).

Lim was reading the opening statetement in a lawsuit by SRC against Najib and SRC chief executive officer Nik Faisal Ariff Kamil before High Court judge Justice Ahmad Fairuz Zainol Abidin here on Tuesday (March 5).

He said the legal action and claims against Najib relate to the events surrounding SRC, which was incorporated as a special purpose vehicle (SPV) on Jan 7, 2011 to invest in conventional and renewable energy, natural resources and the minerals sector.

"These investments were ultimately meant for the rakyat, with the expectation that those in power would act in good faith for the benefit of the public," he said.

Lim also said that Najib could be sued for dishonest conduct and abuse of power in the company as the tort of misfeasance in public office had stated that no man is above the law and to that extent, the rule applies to both public and private law elements.

This is unlike other torts, which are wholly private in nature, he added.

He said this meant that Najib, the first defendant, could be sued in tort in his capacity as the prime minister, who is a public officer.

The lawsuit by SRC was filed in May 2021, alleging that Najib had committed breach of trust and abuse of power, had misappropriated the company's funds and personally benefitted from it.

The company sought general, exemplary and additional damages, interests, costs and other reliefs deemed fit by the court.

It also sought a court declaration that Najib is responsible for the company’s losses due to his breach of duties and trusts, and a demand for Najib to pay back the RM42mil in losses that it suffered.

Najib, 70, is currently serving a jail sentence at Kajang Prison after being convicted of criminal breach of trust and abuse of power in the misappropriation of RM42mil in SRC International funds.

The Federal Territories Pardons Board recently reduced his jail term from 12 years to six, and his fine from RM210mil to RM50mil.

The hearing continues.

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