Najib denies being SRC shadow director

 

Several weeks after he was convicted of misappropriating RM2.3 billion involving funds linked to 1MDB, former prime minister Najib Abdul Razak was back in the High Court in Kuala Lumpur today.

He was testifying in an RM42 million civil suit filed against him by SRC International Sdn Bhd and its subsidiary, Gandingan Mentari Sdn Bhd.

Najib, 72, named the sole defendant in the suit, said he respectfully disagreed with the premise of the action by SRC against him, saying the claim was flawed as it attempted to personalise institutional decisions and wrongly portray him as having exercised control over the company’s affairs.

Under SRC’s constitution and the Companies Act, the management of the company lies with its board of directors and officers.

“Any approvals or consents associated with my public offices were sequenced after the board processes and did not convert me into a de facto or shadow director.

"The plaintiff (SRC) had wrongly interpreted SRC’s Memorandum and Articles of Association as giving me 'ultimate control' over the company, when in fact the provisions merely involved shareholder consent or advice on matters of national interest.

“They did not allow me to issue binding directions to the board of directors," Najib said in his witness statement during examination-in-chief by his counsel, Farhan Shafee.

Najib said the plaintiff was asking the court to assume he was a “shadow director”, but argued there was no evidence that the board acted on his instructions, as records showed decisions were made through management proposals, board discussions and approvals by the Ministry of Finance Incorporated (MOF Inc), not by him.

"The suit also tries to turn the existence of certain MOF Inc minutes into evidence that I issued instructions to SRC. Shareholder minutes are not the board's directions, as they sit within a separate governance lane.

"Questions have been raised about the regularity and authenticity of some of those documents. In all events, even genuine shareholder minutes cannot relieve directors of their duty to exercise independent judgment," he said.

‘I did not use anyone’

SRC International previously removed five of its directors from the lawsuit, including Ismee Ismail, Suboh Yassin and Shahrol Azral Ibrahim Halmi, retaining Najib as the sole defendant.

However, the High Court later granted Najib permission to issue third-party notices against them.

Najib also maintained that he did not instruct anyone to transfer SRC’s money to him and said he did not know at the material time that the RM42 million allegedly originated from SRC.

“I did not use Nik Faisal, or anyone, as a conduit to dictate outcomes to the SRC board or to orchestrate the RM42 million credits into my accounts. If any officer represented that ‘these are the prime minister’s instructions’, that was not authorised by me and would have been contrary to proper corporate governance,” he said.

The suit, which was filed in 2021, involves SRC and Gandingan Mentari seeking a declaration that Najib is liable to them for the receipt of RM42 million, as well as damages for knowing receipt, dishonest assistance, the tort of misfeasance and abuse of power.

The hearing before judge Raja Ahmad Mohzanuddin Shah Raja Mohzan continues tomorrow.

- Bernama