Najib was shadow director with enormous influence on SRC: High Court

SRC TRIAL | Former prime minister and finance minister Najib Abdul Razak was a shadow director with enormous influence and an overarching position of power in SRC International, the Kuala Lumpur High Court ruled.

In delivering his decision today that Najib, who was also SRC's advisor emeritus, must enter his defence in the RM42 million SRC International case, judge Mohd Nazlan Mohd Ghazali made this description of the accused in relation to his alleged ability to convince SRC directors to follow important decisions such as depositing the bulk of the company's funds overseas.

Nazlan was explaining part of the reason the court ruled that Najib must enter his defence to the three charges of criminal breach of trust involving the RM42 million allegedly misappropriated from SRC.

The judge noted that SRC directors’ compliance was not unexpected as the decisions of the shareholder, via Najib’s position in Minister of Finance Incorporated (MoF Inc) which fully owned the company, was furnished by no less than the then prime minister and finance minister of the country, Najib.

“The accused had enormous influence and wielded an overarching position of power in SRC. He was not only the person who as FM (finance minister) also the MoF Inc (Minister of Finance Incorporated), the sole shareholder of SRC and 1MDB but was also as the PM (prime minister) vested with the authority under articles of SRC to appoint and dismiss directors of the company and to whom certain reserved matters, including amendments, must be referred.

“And as the PM and MoF Inc, the accused also caused the introduction of a new article 117 to appoint himself as an advisor emeritus of the company, to whom advice on strategic matters concerning SRC must be referred.

“The point to note is, those decisions were taken because of the directors’ stance, which construed the resolutions from the shareholder who was also the PM and later advisor emeritus of the company, as a form of instructions or otherwise as matters that they should follow.

“And that renders the accused to fall squarely within the concept of shadow director or the director within the meaning ascribed to it in Section 402A of the Penal Code,” Nazlan ruled today.

Section 402A deals with the definition of director and other terms relevant to the offence of criminal breach of trust under Section 405 of the code, among others.

The section defines a director as including any person occupying the position of director of a company, by whatever name called, and includes a person who acts or issues directions or instructions in a manner in which directors of a company are accustomed to issue or act, and includes an alternate or substitute director, notwithstanding any defect in the appointment or qualification of such person.

On June 11, former SRC director Ismee Ismail (photo) testified that the amendment to insert Article 117 into the company’s articles and memorandum of association, gave Najib total control over the administration of the company.

Meanwhile, after today's proceedings, Najib's lead defence counsel Muhammad Shafee Abdullah in commenting on the judgement said the judge had taken different interpretation on the case facts and the law.

He said the defence's opinion was that the word 'director' under Section 409 of the Penal Code cannot be interpreted liberally to include shadow director.

"Frankly, we were expecting an acquittal at this stage, because in our submission that we have produced, we thought it was overwhelming. It was not just a good case, it was overwhelming both factually and legally speaking.

"But in trials, you can never predict (the outcome). You see, my view and another person's view can be different. Having said that, we heard very carefully what the learned judge said, (and) of course we have to give the greatest respect to his view. He has heard the evidence. He has taken different interpretation both the facts and the law.

"Like for instance we have always said to be a director in the context of Section 409 of the Penal Code, you must be a real director. No such thing as a shadow director.

"Because 'shadow' is a concept in civil law, never in criminal law," he said.

Shafee later added that in speaking about shadow director, wanted financier Low Taek Jho is supposedly the real shadow director.

He also alleged that an example would be that of former SRC International CEO Nik Faisal Ariff Kamil, who was also the mandated person for Najib's AmBank accounts.

In fact, according to Shafee, Nik Faisal came into the picture as he was recommended by Jho Low to Najib's chief private secretary, the late Azlin Alias.

"If you are talking about shadow directors, this is the real shadow director," he said. - Mkini