Najib was 'puppet master' of SRC board directors, appeal court hears

 

Former premier Najib Abdul Razak was the "puppet master" and the SRC International board of directors were the "puppets", the Court of Appeal heard today.

Deputy public prosecutor V Sithambaram made this description of Najib, who at one point was finance minister and advisor emeritus to SRC, a fully owned entity of Minister of Finance Incorporated (MOF Inc).

The DPP was submitting during the hearing of Najib’s appeal to set aside his conviction and sentencing over an RM42 million corruption case involving SRC International.

Sithambaram’s description was made during the prosecution’s counter-submission against Najib’s appeal.

He was submitting in the context of Najib’s conviction under three charges of criminal breach of trust (CBT) in relation to RM42 million of funds from SRC.

“The appellant (Najib) was the 'shadow director' of SRC. The legal definition of a director is not defined in Section 402A PC (Penal Code) not merely by the official designation afforded to it but also by the manner in which the role is played as the controlling mind in the operations of the company.

“It is submitted that the conduct of the appellant in issuing many shareholder instructions fits the description of the puppeteer (the appellant) in absolute control of the puppets (the board of directors) that he himself had placed when he appointed all the members of the SRC board of directors, who were unable to dance to any other tune except to that of his.

“Several illustrations of the appellant’s actions showing his control of the SRC board of directors can be seen in numerous documents,” Sithambaram submitted before the three-person Court of Appeal bench.

He claimed that Najib used his overarching influence over SRC solely for his personal benefit rather than the company.

Deputy public prosecutor V Sithambaram

“The appellant’s overarching authority and control over the affairs of SRC completely rendered the SRC BOD as puppets dancing to the tune of its master, the appellant.

“The appellant’s unique position in SRC, since its incorporation and subsequent conversion to an MOF Inc company, clearly proves that the appellant is not merely acting in an official capacity as part of the government mechanism.

“The appellant’s control and dominion over SRC is evident from the fact that he had acted in his own name and not in the name of a principal when he himself signed all the shareholder instructions that were subsequently executed by the SRC BOD.

“The respondent (prosecution) submits that the appellant is indeed an agent and a director of SRC. Being in that capacity, the appellant did not act in the best interests of the shareholder of SRC, which is MOF Inc and by extension the government of Malaysia.

“The appellant was acting solely for his personal benefit,” Sithambaram contended.

The DPP further argued that the overarching influence of Najib over SRC could be seen in how RM4 billion of loans from Retirement Fund Incorporated (KWAP) to SRC, ended up with around RM3.6 billion transferred overseas.

It was reported that the RM3.6 billion, which was sent to a financial institution in Switzerland for fixed deposit, has since been frozen by Swiss authorities.

“The combined roles played by the appellant as the PM (prime minister), the FM (finance minister), the corporate representative of MOF Inc and the advisor emeritus (to SRC), enabled him to execute his game plan to benefit from the funds of SRC.

“The appellant placed himself in a position where the SRC BOD acted on his instructions rather than as independent directors. Whilst the law requires that the SRC BOD should always act in the best interests of SRC, it was actually acting (unknowingly) in the best interests of the appellant.

“The SRC BOD was rendered toothless and powerless by the most powerful man in the country. This resulted in the outflow of about RM4 billion of SRC’s funds overseas for dubious reasons. The funds have disappeared while the debt is still being paid by the government from public funds,” Sithambaram.

One of the charges on which Najib was convicted involved one count of abuse of power, in relation to cabinet approval for government guarantees over KWAP giving the RM4 billion in loans to SRC. The green light was given via two cabinet meetings held between late 2011 and early 2012.

The hearing is set to continue this afternoon and tomorrow.

The bench was chaired by Court of Appeal judge Abdul Karim Abdul Jalil. The other bench members were judges Vazeer Alam Mydin Meera and Has Zanah Mehat.

On July 28 last year, the Kuala Lumpur High Court convicted Najib on one count of abuse of power, three counts of CBT and three counts of money laundering in the RM42 million SRC trial.

Trial judge Mohd Nazlan Mohd Ghazali then sentenced Najib to 12 years in jail and a fine of RM210 million.

The lower court allowed the defence team's application for a stay of the sentence pending the disposal of his appeal.

SRC, which was once a subsidiary of troubled sovereign wealth fund 1MDB, later became fully owned by MoF Inch.

Najib was also the chairperson of 1MDB’s board of advisers. - Mkini