‘SRC didn’t do due diligence when sending RM1.8b abroad’
KUALA LUMPUR: The High Court here was told yesterday that SRC International Sdn Bhd failed to perform due diligence in the first loan of RM1.8 billion from the Retirement Fund Incorporated (KWAP) before the money was transferred offshore allegedly for investment.
Former SRC International director Datuk Shahrol Azral Ibrahim Halmi, 54, said due diligence was not carried out as the directors’ circular resolution was signed and approved by then prime minister and finance minister Datuk Seri Najib Razak.
He said this when testifying as a third party in SRC International’s US$1.18 billion civil suit against Najib and the company’s former chief executive officer, Nik Faisal Ariff Kamil.
“I felt I was under obligation from the instructions of the PM. I would have preferred for information to be available, but I went ahead and signed it. It wasn’t only instructions.
“This was signed by the PM and former finance minister and shareholder of 1MDB, so that carried a lot of weight.
“We tried to find as much information as we could, but when it came to execution, the PM signed off.
“So we had to do it. The PM thought it was a good idea, I trusted his judgment,” Shahrol Azral said when questioned by Najib’s counsel, Harvinderjit Singh.
The loan money was transferred to Falcon Private Bank Ltd in Switzerland and Julius Baer in Hong Kong to acquire two companies in Indonesia — PT ABM Investama and Bumi Resources TBk PT — and two companies in Mongolia — Gobi Coal and Energy Ltd and Erdens-Tavan Tolgoi.
In the SRC criminal trial in 2019, former chairman Tan Sri Ismee Ismail testified that Nik Faisal was ordered by Najib to transfer out the money in a meeting on Sept 7, 2011.
SRC filed a suit in 2021 claiming that Najib had committed breach of trust and power abuse and had benefited from and misappropriated the company’s funds.
SRC is 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 the RM42 million in losses it has suffered.
Najib, 70, is serving a 12-year jail sentence at the Kajang Prison after being convicted of misappropriating RM42 million in SRC International funds.
He filed a petition for a royal pardon on Sept 2, 2022. In January, the Pardons Board reduced Najib’s jail term from 12 years to six and the fine from RM210 million to RM50 million.
The trial before judge Datuk Ahmad Fairuz Zainol Abidin continues on May 6.