KUALA LUMPUR: Datuk Seri Najib Razak had absolute power over SRC International Sdn Bhd, including its business strategy, administration and operations, the High Court heard today.
SRC International is a subsidiary of 1Malaysia Development Bhd (1MDB), originally known as Terengganu Investment Authority (TIA) before the federal government took over on Sept 25, 2009.
Former SRC director Datuk Shahrol Azral Ibrahim Halmi said Najib was the one with the authority to make final decisions, including how the RM4 billion loan from the Retirement Fund Incorporated (KWAP) would be used and disbursed.
Shahrol Azral, who is also the former 1MDB chief executive officer, said he had no authority to issue directives or to make any decisions for the company.
However, he said he was obliged under the law to comply with and execute Najib's decisions and directives.
He also denied that he was the one responsible for applying for the RM4 billion loan from KWAP and how it was subsequently disbursed.
"All major decisions involving such a large sum of money were made by Najib.
"As a mere director, I had no authority to make any decisions regarding the RM4 billion loan.
"Furthermore, KWAP which is a statutory body established under the Retirement Fund Act 2007 is required to report directly to the finance minister at that time (Najib) and he is the one who approved SRC International's loan application, either directly or through his directives to the KWAP's investment panel," he said.
He said this when testifying as a witness in the lawsuit filed by SRC International against Najib and former 1MDB chief executive officer Nik Faisal Ariff Kamil as the first and second defendants.
Shahrol Azral was named as the third respondent along with other former directors – Datuk Suboh Md Yassin, Datuk Mohamed Azhar Osman Khairuddin, Tan Sri Ismee Ismail, and Datuk Che Abdullah@ Rashidi Che Omar.
On May 7, 2021, SRC International's new management initiated legal action against Najib, naming him as the first defendant, for alleged breach of trust and breach of statutory duty involving the RM4 billion KWAP loan to the company.
SRC International sought several declarations such as including Najib as being liable to account for and pay the sum of US$ 1.18 billion being the loss of the proposed investment funds.
It includes a declaration that Najib and Nik Faisal must return the sum of US$120 million and US$2 million respectively.
On July 28, 2020, Najib was sentenced to 12 years' jail and fined RM210 million after he was found guilty of one count of abuse of power with regard to KWAP's RM4 billion loan to SRC International, as well as three counts each of criminal breach of trust and abuse of power involving RM42 million of SRC International funds.
However, the Federal Territories Pardons Board reduced Najib's fine as well as halved his 12-year jail term to six while his initial fine of RM210 million has been reduced to RM50 million.
