NAJIB’S LAWYER TRIES TO ‘TRIP’ KWAP OFFICER BUT IT BOOMERANGS: I WOULD NEVER RECOMMEND THE RM4 BILLION LOANS, THE WAIVER MAY HAVE BEEN APPROVED BUT IT IS STILL ILLEGAL – KWAP’S AMIRUL STANDS HIS GROUND IN COURT

A RETIREMENT Fund Inc (KWAP) senior officer today insisted he never recommended that an investment panel approve RM4 billion in loans to SRC International Sdn Bhd.

Former KWAP assistant vice-president (fixed income department) Amirul Imran Ahmat also maintained that the loans given to the former 1Malaysia Development Bhd unit amounted to offences, as they violated the fund’s investment policy and guidelines.

He said the loan amount was too big in comparison to SRC International’s equity, which was RM1 million, adding that the loans exceeded 10% of all domestic fixed-income investment.

During cross-examination, defence counsel Harvinderjit Singh asked whether the panel asked for a waiver regarding the loans.

Amirul: Yes, we asked for a waiver.

Harvinderjit: That means there was no offence?

A: No. I stand by my original statement.

H: We’ve been through this already. It was waived. So, it’s not an offence.

A: I don’t agree. It’s still an offence. It was waived.

SRC International received a RM2 billion loan on August 26, 2011 via four tranches of RM500 million each.

When examined by the prosecution yesterday, Amirul said he was under pressure to expedite the second loan application of RM2 billion on March 28, 2012, despite it violating Paragraph 5 of KWAP’s investment policy and guidelines.

He said the loan to SRC International exceeded the equity of the shareholder, that is SRC International, which only had equity worth RM1 million, but the requests for loans amounting to RM4 billion were approved.

Amirul told the court there were also violations under Paragraph 2, whereby total KWAP investment in the form of loans is not allowed to exceed 10% of the allocation for domestic fixed-income investments.

Today, he maintained that he never recommended that the investment panel give the nod to the second RM2 billion loan.

This is despite the word “recommendation” being present in the letter, with Amirul saying it is “standard” for an investment paper.

Harvinderjit clarified that Amirul’s proposal was for RM1 billion, and that the investment panel was told it had to lower the financing amount.

Amirul denied that the RM1 billion was his recommendation, saying as author of the investment paper, he signed off on it for the panel to deliberate on the matter.

Harvinderjit pushed him once more on whether the RM1 billion was his recommendation.

Amirul said: “Do you want a yes or no answer, or what?”

He said he did not present the investment paper to the panel, which was done by his superior, KWAP fixed income director Ahmad Norhisham.

He said the second loan differed from the first, as ownership of SRC International had gone from 1MDB to being fully owned by Ministry of Finance Inc, thus, the second RM2 billion loan in 2012 was government-guaranteed, allowing the investment panel to waive the regulatory violations.

Yesterday, Amirul testified that the money borrowed from KWAP could only be used for the purposes stated in the loan agreements, and doing otherwise was in violation of the terms and may result in an “event of default”.

The fund can then claim back the principal owed, plus interest, he said.

“Based on both the loan agreement and additional agreement for the second loan, the money borrowed from KWAP cannot be used for the purposes of ‘corporate social responsibility’, as social, charity and political work is not stated in both agreements for the loans amounting to RM4 billion.”

He said the agreement for the first RM2 billion loan was only for working capital and general investment, and the second was for investment in natural resources.

Najib faces three counts of criminal breach of trust, three counts of money-laundering and one count of abuse of power over RM42 million allegedly deposited into his accounts.

The money, said witnesses, came from a RM4 billion loan funnelled to SRC International from KWAP.

The former prime minister is represented by a dozen lawyers, led by Muhammad Shafee Abdullah.

Attorney-General Tommy Thomas is leading the prosecution, while justice Mohd Nazlan Mohd Ghazali is presiding.

THE MALAYSIAN INSIGHT