Former SRC director refutes claims by Najib for 1MBD losses

KUALA LUMPUR: A former director of SRC International Sdn Bhd has refuted claims by Datuk Seri Najib Razak who placed the blame on SRC's former directors for the losses incurred by the subsidiary of 1Malaysia Development Bhd (1MDB).

Datuk Mohammed Azhar Osman Khairuddin, who was also the company's former CEO, denied claims by the former prime minister that the losses were a result of various acts and omissions of the former directors.

"I categorically deny that any act or omission by myself had caused the losses," he said here on Monday (March 25).

Mohammed Azhar held the position of director at SRC between July 29, 2014 and Feb 22, 2017.

He was testifying as the third individual named in a list of third-party respondents in SRC's lawsuit against Najib for breach of statutory duties in the company.

According to Mohammed Azhar, he had urged SRC's CEO Nik Faisal Ariff Kamil to try and retrieve the monies that SRC had disbursed abroad after he found out the severity of the losses suffered by SRC.

He said the Board was briefed that SRC was not doing financially well with its debts already exceeding its assets.

"As I recall, Nik Faisal briefed the Board by telling us that the funds deposited in BSI Bank had been invested securely.

"He told the Board that if we were to call back the funds before maturity, SRC would suffer a high penalty.

"I stressed to Nik Faisal that he had to do everything in his power to bring back the funds with BSI Bank. The Board even resolved to table at the next Board meeting a redemption plan," he added.

Mohammed Azhar also testified that SRC's loans from Retirement Fund Inc were disbursed out of SRC before his directorship.

"I was also never a signatory nor ever in a position to give instructions to the accounts deposited overseas, whether in Switzerland or elsewhere.

"I cannot be in breach of statutory and fiduciary duties for matters that happened before my time," he said.

Under new management, SRC filed the legal action in May 2021, alleging that Najib had committed breach of trust, abuse of power, misappropriated the company's funds and personally benefited from it.

It named Najib along with its former directors Datuk Suboh Md Yassin, Mohammed Azhar, Nik Faisal Ariff Kamil, Datuk Che Abdullah @ Rashidi Che Omar, Datuk Shahrol Azral Ibrahim Halmi and Tan Sri Ismee Ismail in May 2021.

However, later, it removed six names from the suit and retained Najib and Nik Faisal as the first and second defendants.

Additionally, Najib has brought the former named SRC International directors as third-party respondents in the suit.

Najib was SRC’s Emeritus Advisor from May 1, 2012, until March 4, 2019.

The company was seeking damages, interests, costs and a court declaration that Najib was responsible for the company’s losses due to his breach of duties and trust, and was demanding that Najib paid back the US$1.18bil in losses that it had suffered.

It was also seeking US$120mil and US$2mil from Najib and Nik Faisal respectively, on account of fraudulent breach of fiduciary duties and breach of trust.

Najib has been serving a jail sentence at the Kajang Prison since Aug 23, 2022, after being convicted of misappropriating RM42mil in SRC International funds.

After he filed a petition for a royal pardon on Sept 2, 2022, his jail term was reduced from 12 years to six years and the fine was reduced to RM50mil from RM210mil.

The hearing continues before Justice Ahmad Fairuz Zainol Abidin on Tuesday (March 26).

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