Najib not behind the formation of SRC International

(FMT) – Former prime minister Najib Razak told the High Court hearing his RM42 million SRC International Sdn Bhd money laundering and power abuse case that he did not order amendments to articles of the company’s constitution that gave him control.

In testifying as the first witness for his defence, Najib said through his witness statement that he was not consulted when amendments to Articles 67 and 116 were made. The amendments give the prime minister the ultimate say in the appointment or sacking of the company’s directors and state that the prime minister’s approval must be had before the board of directors can execute any decision.

“I was not involved during the stage when SRC was established or any amendments made to the company’s constitution.

“After reading the relevant documents on SRC’s formation, I came to know that SRC was formed through B&M Consultancy Services Sdn Bhd and Lim Poh Seng, who was 1MDB company secretary then,” he said, adding that the then minister Nor Mohamed Yakcob, in charge of the economic planning unit under the Prime Minister’s Office, had approved the setting up of SRC International.

To a question by his lawyer Wan Aizuddin Wan Mohammed on why Najib did not find it “surprising” that the company constitution contained two articles giving power to the prime minister in a company owned by Minister of Finance Incorporated or MoF Inc, Najib said other government linked companies (GLCs) also had similar provisions giving the prime minister the power to control the company’s affairs.

“If the court allows me to explain, the prime minister’s powers in Petronas are more overarching compared to SRC,” he said, adding that under Petronas’ memorandum and articles of association, only the prime minister has the power to appoint its chairman and the chairman must act according to the prime minister’s orders.

Najib added, “The article was drafted in that way so that the prime minister can make sure the chairman acts according to the government’s policies.”

Najib also told the court he was made aware of SRC International’s formation around August 2010, from a letter by then 1MDB chief executive officer Shahrol Azral Ibrahim Halmi in connection with a proposal to set up a company to implement national energy policy needs.

To a question whether he had the power to approve a RM3 billion grant sought by SRC International as the prime minister then, Najib said he could do that but he was advised against it.

“I normally listen to advice from officers in the relevant ministries and agencies before I come out with a decision. They were of the view that the money SRC had asked for should not come from development funds as this may effect other industries,” he added.

Previously the court was told that SRC International, a subsidiary company of 1MDB, had wanted RM3 billion to set up the energy company and had sent a letter to EPU asking for money.

However, witness and former EPU officer Kamariah Noruddin said the RM3 billion was not approved and the ministry only gave RM20 million to SRC International.

Najib is facing six charges of money laundering and criminal breach of trust in the transfer of RM42 million to his account from SRC International.

He is also accused of abusing his power as prime minister by giving government guarantees on SRC International’s RM4 billion loan from Retirement Fund Inc.

The hearing continues before High Court judge Mohd Nazlan Mohd Ghazali.