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Responsibility for transactions lies with SRC International's board, says lawyer
Responsibility for transactions lies with SRC International's board, says lawyer

The Star

time2 days ago

  • Business
  • The Star

Responsibility for transactions lies with SRC International's board, says lawyer

KUALA LUMPUR: The High Court was told on Tuesday (July 8) that the responsibility for transactions undertaken by SRC International Sdn Bhd lies with its board of directors and management. Lawyer Muhammad Farhan Muhammad Shafee, representing Datuk Seri Najib Razak, submitted that his client did not exercise exclusive control over SRC's operations or the handling of loan proceeds obtained from the Retirement Fund Inc (KWAP). "The board executed all relevant transactions and bore responsibility for oversight. If any misappropriation occurred, it was due to the board's own decisions. Even taking Najib's purported instructions at their highest, he ultimately vested responsibility in the board to properly manage the funds,' he said. Muhammad Farhan advanced the submission during the hearing of SRC's US$1.18bil civil suit against Datuk Seri Najib Razak and former SRC chief executive officer Nik Faisal Ariff Kamil, who remains at large. He further contended that Najib neither exercised control over the decisions of SRC's board of directors nor owed fiduciary duties to the company in the capacity of a director. "Any formal roles or shareholder approval rights he held were part of lawful governance structures and did not make him the 'controlling mind' of SRC in breach of duty. "In other words, responsibility, duty, trust - and ultimately, liability - rest with the board,' said Muhammad Farhan before Judge Datuk Ahmad Fairuz Zainol Abidin. The submission will resume on Aug 25. In May 2021, SRC, through its new management, initiated the suit alleging that Najib had committed breaches of trust and abuse of power, personally benefitted from company funds and misappropriated those funds. The company is also seeking a declaration that Najib is liable for the company's losses arising from his alleged breaches of duty and trust, and an order compelling him to repay RM42mil in losses purportedly suffered by the company. Najib is currently serving a jail term in Kajang Prison for the misappropriation of RM42mil in the SRC International funds case. On Sept 2, 2022, he filed a petition for a royal pardon. This led to his jail term being halved from 12 to six years and the RM210mil fine imposed on him reduced to RM50mil on Jan 29, 2024. - Bernama

SRC International board responsible for transactions, Najib's lawyer argues
SRC International board responsible for transactions, Najib's lawyer argues

The Sun

time2 days ago

  • Business
  • The Sun

SRC International board responsible for transactions, Najib's lawyer argues

KUALA LUMPUR: The High Court was informed that the board of directors and management of SRC International Sdn Bhd held responsibility for the company's financial transactions, not Datuk Seri Najib Tun Razak. Muhammad Farhan Muhammad Shafee, Najib's lawyer, argued that his client did not have exclusive control over SRC's operations or the handling of funds obtained from the Retirement Fund Inc (KWAP). 'The board executed all relevant transactions and bore responsibility for oversight. If any misappropriation occurred, it was due to the board's own decisions,' he said. The submission was made during the hearing of SRC's USD1.18 billion civil suit against Najib and former CEO Nik Faisal Ariff Kamil, who remains at large. Muhammad Farhan contended that Najib neither controlled the board's decisions nor owed fiduciary duties as a director. 'Any formal roles or shareholder approval rights he held were part of lawful governance structures and did not make him the 'controlling mind' of SRC in breach of duty,' he said before Judge Datuk Ahmad Fairuz Zainol Abidin. SRC, under new management, filed the suit in May 2021, alleging Najib breached trust, abused power, and misappropriated funds. The company seeks repayment of RM42 million in losses. Najib is currently serving a reduced six-year jail term for misappropriating SRC funds. His petition for a royal pardon led to a halved sentence and a reduced fine of RM50 million. The case resumes on Aug 25. - Bernama

Najib orchestrated SRC fraud for personal gain, court told
Najib orchestrated SRC fraud for personal gain, court told

New Straits Times

time3 days ago

  • Business
  • New Straits Times

Najib orchestrated SRC fraud for personal gain, court told

KUALA LUMPUR: Datuk Seri Najib Razak was the primary beneficiary in a large-scale fraud involving SRC International Sdn Bhd, the High Court heard today. Lawyer Datuk Lim Chee Wee said SRC International, formerly a 1MDB subsidiary, was exploited by the former prime minister for personal gain, straying from its public-interest mandate. He said this in his submissions during the hearing of SRC International's suit against Najib and former chief executive Nik Faisal Ariff Kamil to recover US$1.18 billion in damages. Nik Faisal, who is wanted in connection with the RM42 million SRC probe, was last traced to Hong Kong in 2020. "Although SRC International suffered massive losses amounting to US$1.18 billion, the first defendant (Najib) received US$120 million into his account and another RM42 million, which is the subject of another separate suit. "He also acted as a shadow director of the company, controlling the board through shareholder resolutions relating to key macro decisions, which should have been made by the company's board. "Najib signed shareholder resolutions to approve and secure a RM4 billion loan from Kumpulan Wang Persaraan (Diperbadankan), or KWAP, and spent RM3.6 billion of that on unlawful purposes. "This makes Najib the main architect behind the substantial loss of US$1.18 billion," he said. A shadow director refers to an individual who, though not formally appointed as a director, exerts significant influence over the company's board and its decisions. The lawyer said Najib gave inconsistent explanations, offering five versions when questioned about the US$120 million SRC International funds credited into his personal bank account. Lim said Najib denied receiving money from the company's funds, instead claiming it was a donation and insisting the account was not managed by him personally but was for corporate social responsibility (CSR). He submitted that Najib abused his public office by, among other things, securing two loans worth RM2 billion and two government guarantees without conducting due diligence or feasibility studies for a company he himself described as "a new company with no track record". He said the loans suffered repayment defaults that Najib attempted to conceal by approving several short-term loans to SRC to avoid default, without any inquiry into repayment capability. On May 7, 2021, SRC International filed a civil suit against Najib and Nik Faisal seeking US$1.18 billion in damages. In the suit, former SRC director Datuk Suboh Md Yassin was named as a third-party respondent along with other former directors, including Tan Sri Ismee Ismail, Datuk Mohamed Azhar Osman Khairuddin, Datuk Shahrol Azral Ibrahim Halmi and Datuk Che Abdullah @ Rashidi Che Omar. The company alleges both defendants conspired and committed breaches of trust, and that Najib abused his powers and gained personal rewards from its funds, in addition to misappropriating them. The company is seeking a declaration that all defendants are liable to pay for the investment fund's losses arising from the use of the loans, as well as general, exemplary and aggravated damages, interest, costs, and any other relief the court deems fit. The hearing before judge Datuk Ahmad Fairuz Zainol Abidin continues tomorrow.

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