KUALA LUMPUR: The High Court has allowed a US$1.3bil lawsuit filed by SRC International Sdn Bhd against Datuk Seri Najib Razak over breach of fiduciary duty and misfeasance in public office, linked to a RM4bil loan from the Retirement Inc Fund (KWAP) to SRC.
Justice Ahmad Fairuz Zainol Abidin, who is now a Court of Appeal judge, found that Najib was liable to account for and pay the sum of US$1.18bil and US$120mil to SRC.
The US$1.18bil was the loss of proposed investment funds linked to SRC while the US$120mil was the compensation for Najib's fraudulent breach of fiduciary duties.
The judge was delivering his decision in the lawsuit filed by SRC in May 2021, alleging that Najib had breached his trust, abused his power, misappropriated the company’s funds, and personally benefited from these actions.
In his decision here on Tuesday, Justice Ahmad Fairuz said Najib had systematically abused his power as the then prime minister and the finance minister.
"He (Najib) procured RM4bil in KWAP's loan through direct intervention of KWAP's leadership, overriding prudent lending limits and enforcing expedited approvals," the judge said on Tuesday (March 31).
Justice Ahmad Fairuz also found that Najib had created the advisor emeritus position in SRC to consolidate his control in the company.
"As advisor emeritus, Najib exercised constitutional powers to direct SRC's investment strategy and other matters or function of SRC's business.
"He required the board to report to him on all material matters," Justice Ahmad Fairuz said.
By concentrating these roles in one person, Justice Ahmad Fairuz said Najib eliminated all institutional checks and balances.
"No single individual should possess such unchecked power, and Najib abused every level of authority he controlled," he said.
The lawsuit originally named Najib, along with former SRC directors Datuk Suboh Md Yassin, Mohammed Azhar Osman Khairuddin, Nik Faisal Ariff Kamil, Datuk Che Abdullah @ Rashidi Che Omar, Datuk Shahrol Azral Ibrahim Halmi and Tan Sri Ismee Ismail.
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 formerly named SRC directors as third-party respondents in the suit.
For the claims against the third-party defendants brought by Najib, the court dismissed all claims with costs.
Najib's lawyer Tan Sri Muhammad Shafee Abdullah later informed the court that his client would be appealing the decision and sought an interim stay of execution on the payment.
Justice Ahmad Fairuz granted the application and told Muhammad Shafee that he has 14 days to file the notice of appeal.
The company was 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 and is demanding that Najib pay back the US$1.18bil in losses that it has 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.
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