Ex-SRC International director denies blame for losses

KUALA LUMPUR: A former director of SRC International Sdn Bhd refuted Datuk Seri Najib Razak’s claims that ex-directors were responsible for the company’s losses, the High Court heard.

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 by former directors.

“I categorically deny that any act or omission by myself caused the losses,” he said here yesterday.

Mohammed Azhar held the position of director at SRC, a subsidiary of 1Malaysia Development Berhad (1MDB), 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 former CEO Nik Faisal Ariff Kamil to try and retrieve the money that the company had disbursed abroad after he found out the severity of its losses.

He said the Board (of directors) 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 into BSI Bank had been invested securely.

“He told the Board that if we were to call back the funds prior to 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 from BSI Bank. The Board even resolved to table at its next meeting a redemption plan,” he added.

Mohammed Azhar also testified that SRC’s loans from Retirement Fund Inc (KWAP) were disbursed out of the company before his directorship.

“I was neither a signatory nor in a position to give instructions over 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, 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 SRC directors as third-party respondents in the suit.

Najib was SRC’s emeritus adviser from May 1, 2012, until March 4, 2019.

The company is seeking damages, interests, costs and a court declaration that Najib is responsible for the company’s losses due to his breach of duties and trust.

It is demanding that Najib pay back the US$1.18bil in losses suffered.

It is 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 Kajang Prison since Aug 23, 2022, after being convicted of misappropriating RM42mil in SRC 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 today.

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