Ex-SRC director denies blame for company losses
KUALA LUMPUR: A former board member of SRC International Sdn Bhd has refuted claims made by Datuk Seri Najib Tun Razak that the losses incurred by the company were a result of various acts and omissions by its former directors.
Datuk Mohammed Azhar Osman Khairuddin, who also served as the former chief executive officer of SRC, refused to accept blame for the losses, stating that he had urged another former CEO, Nik Faisal Ariff Kamil, to attempt to recover funds disbursed abroad by SRC upon discovering the severity of the losses suffered by the company.
Mohammed Azhar also denied Najib’s claim that the former directors of SRC, including himself, had breached their statutory duties, asserting that he cannot be held responsible for matters that occurred before his tenure.
“My specific task when joining SRC was to execute and get the Sabah Gas Pipeline Project and the Peninsular Pipeline Project going, which were two out of the three identified oil and gas projects in my role as CEO,” said the witness, who testified yesterday as the third party in SRC International’s US$1.18 billion civil suit against the former prime minister.
Azhar, 69, who served as an SRC director from July 29, 2014 to Feb 22, 2017, was initially named as a defendant in the suit.
However, he was removed by SRC and brought back in as a third party by Najib.
The witness also refuted Najib’s claim that the board had exclusive powers to manage the company, stating that Nik Faisal, who was part of SRC management, would regularly brief the board on SRC finances.
“Myself and other members of the board directed Nik Faisal and the management to develop a plan to recover the funds.
“That was all I could do, given that the loans from the Retirement Fund Inc (KWAP) were disbursed by SRC before my tenure as a director,” he said in his witness statement.
The RM4 billion KWAP loan was granted in the second half of 2011 and the first half of 2012.
Mohammed Azhar said that during a board of directors’ meeting on April 28, 2015, Nik Faisal briefed the board, stating that the funds deposited in BSI Bank were securely invested.
“He told the board that if we were to call back the funds prior to maturity, SRC will suffer a high penalty.
Earlier we were briefed that SRC was not doing financially well, with its debts already exceeding its assets.
“In reply, 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 said.
SRC, under its new management, filed the suit in May 2021, claiming that Najib had committed breach of trust and power abuse, personally benefited from the company’s funds, and misappropriated the said funds.
It is also seeking a court declaration that Najib is responsible for the company’s losses due to his breach of duties and trust and for Najib to pay back the RM42 million in losses that they have suffered.
Najib, 70, has been serving a jail sentence at the Kajang Prison since Aug 23, 2022 after being convicted of misappropriating RM42 million in SRC International funds.
He then filed a petition for a Royal pardon on Sept 2, 2022, and the Pardons Board on Jan 29 reduced Najib’s jail term from 12 years to six, with the fine cut to RM50 million from RM210 million.
The trial before judge Datuk Ahmad Fairuz Zainol Abidin continues today. — Bernama