KUALA LUMPUR: Datuk Seri Najib Razak is liable for the billions of dollars in losses incurred by SRC International Sdn Bhd when he breached his fiduciary duty to the company, the High Court ruled.
Justice Ahmad Fairuz Zainol Abidin, in his decision for the US$1.3bil (RM5.3bil) lawsuit filed by SRC against Najib, also said the former prime minister had committed misfeasance in public office, linked to a RM4bil (RM16.2bil) loan SRC took from the Retirement Inc Fund (KWAP).
The court found that Najib was liable to account for and pay the sum of US$1.18bil (RM4.8bil) for the loss of proposed investment funds, and US$120mil (RM486mil) for fraudulent breach of fiduciary duty to SRC.
In allowing the lawsuit, the court said SRC had successfully established on a balance of probabilities that part of the funds was traced to Najib’s personal bank account.
Justice Ahmad Fairuz, who is now a Court of Appeal judge, said Najib systematically abused his power as the then prime minister and 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 yesterday.
The court also found that Najib had created the adviser emeritus position in SRC, which he held, to consolidate his control in the company.
“As adviser emeritus, Najib exercised constitutional powers to direct SRC’s investment strategy and other matters or functions 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.
SRC filed the lawsuit in May 2021 and 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.
It is alleged that Najib committed breach of trust, abused power, misappropriated the company’s funds, and personally benefited from these actions.
However, the company later removed five names from the suit and retained Najib and Nik Faisal as the first and second defendants.
Najib then brought the formerly named SRC directors as third-party respondents in the suit.
In yesterday’s decision, for the claims against the third party respondents brought by Najib, the court dismissed all claims with costs.
Najib’s lawyer Tan Sri Muhammad Shafee Abdullah informed the court that his client would be appealing the decision and sought for 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.
