2 days ago
Najib denies liability in SRC US$1.1b suit, blames board for fund misuse
KUALA LUMPUR, July 8 — Former prime minister Datuk Seri Najib Razak played no role in approving or directing the transfer of SRC International Sdn Bhd's funds, his lawyer told the High Court today.
Najib's counsel Muhammad Farhan Muhammad Shafee said Najib gave no operative instructions regarding the transfers of SRC International monies into specific fiduciary funds.
Muhammad Farhan argued that, at best, Najib merely chose the financial institution, which at that time was known to be reputable.
He said this in his submission at the close of the defendant's case in SRC International's US$1.18 billion civil suit against Najib and former SRC chief executive Nik Faisal Ariff Kamil, who is currently at large.
'If misappropriation occurred, it was due to the board's own decisions (or dereliction thereof) as even taking the purported instructions of the first defendant at its highest, he ultimately vested responsibility to the board to properly manage the funds (even if it were within the parameters of his directions).'
Muhammad Farhan said the entire chain of events – from SRC International sending RM1.8 billion to SRC BVI to placing them in so-called intermediaries and later moving them to various entities linked to Malaysian businessman-turned-fugitive Jho Low – were carried out by former company chief executive Nik Faisal Ariff Kamil, Low, and former company director Datuk Suboh Md Yassin.
'The first defendant's name does not appear on any of the transactional documents authorising those movements.'
'If anything, Jho Low misrepresented having the first defendant's backing to persuade others, but no evidence shows the first defendant knowingly agreed to such misuse.'
'To take the plaintiff's narrative sets a dangerous precedent that anybody can use the name of the prime minister with impunity to get what they want and then unload all the liability on him,' Muhammad Farhan said.
He said should the court hold Najib liable in any way, the directors – who actually controlled the funds and breached duties – should indemnify him because in equity they are primarily liable for the loss.
'To absolve them would set that 'dangerous precedent' we mentioned, encouraging directors of GLCs to abdicate responsibility whenever a higher official is involved,' he said.
Imprisoned since 23 August 2022, Najib is serving a 12-year jail sentence and an RM210 million fine for his conviction over the misappropriation of RM42 million from SRC International, which has recently been reduced to six years of imprisonment and an RM50 million fine by the Pardons Board.
SRC, under new management, sued Najib and several former directors — Suboh, Datuk Mohammed Azhar Osman Khairuddin, Nik Faisal, Datuk Che Abdullah @ Rashidi Che Omar, Datuk Shahrol Azral Ibrahim Halmi, and Tan Sri Ismee Ismail — in May 2021.
However, five names were later removed from the suit, leaving Najib as the sole defendant.
Additionally, Najib has named the former directors of SRC International as third-party respondents.
SRC, as the plaintiff in the writ of summons, has alleged that Najib abused his power to obtain personal benefits from SRC International's funds and misappropriated these funds.
Najib served as SRC's Emeritus Adviser from 1 May 2012 until 4 March 2019.
Now wholly owned by the Ministry of Finance Incorporated (MoF Inc), SRC International is seeking general damages, exemplary damages, additional interest, costs, and other appropriate relief from the court.
The company seeks a declaration that Najib is liable for the company's losses due to his breach of duties and trust.
It is also seeking an order for Najib to pay US$1.18 billion in losses suffered, along with damages for breach of duties and trust, including an order for him to compensate the US$120 million that entered his bank account.
