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This article first appeared in The Edge Malaysia Weekly on June 8, 2020 - June 14, 2020

The case of SRC funds totalling RM42 million

Total number of charges: 7

3 counts of criminal breach of trust
Offence: Section 409 of the  Penal Code
Penalty: Maximum 20 years’ jail + whipping + a fine

1 count of abuse of power
Offence: Section 23(1) of MACC Act 2009 (punishable under Section 24 of the same act)
Penalty: Maximum 20 years’ jail + a fine of not less than five times the amount of the bribe, or RM10,000, whichever is higher

3 counts of money laundering
Offence:  Section 4(1)(b) of AMLATFPUAA 2001
Penalty: Maximum 15 years’ jail + a fine of RM5 million, or five times the amount, whichever is higher, for each charge


WAS Datuk Seri Najib Razak a victim of an elaborate conspiracy involving numerous individuals, including some of those closest to him, or a party — nay, key protagonist — in one?

Both arguments were put before the court last week by the defence and prosecution during oral submissions in the former prime minister’s trial involving the misappropriation of RM42 million belonging to state-owned SRC International Sdn Bhd, a former subsidiary of 1Malaysia Development Bhd (1MDB).

Interestingly, when the 1MDB scandal first broke in early July 2015, Najib was quick to claim that the RM2.6 billion transferred to his personal bank accounts were donations from unnamed Saudi royalty.

As SRC’s trial reached its tail-end, however, Najib's stance shifted. His defence contended that he was a victim of a conspiracy hatched by fugitive businessman Low Taek Jho, former SRC managing director and CEO Nik Faisal Ariff Kamil and other board members, and former AmBank relationship manager Joanna Yu Ging Ping.

But Najib remained adamant that he genuinely believed the RM42 million that entered his account between December 2014 and February 2015 was a continuation of the donations he received in prior years from the Saudi royal family.

His lawyer Harvinderjit Singh argued that because Najib was informed by the Saudi king that donations were forthcoming, and later received a letter purportedly from a Saudi prince confirming the donation, he had no reason to question the source of the funds.

Furthermore, Bank Negara Malaysia and then central bank governor Tan Sri Zeti Akhtar Aziz’s sighting of the letter without objections had reinforced Najib's belief, Harvinderjit added.

Appointed prosecutor Datuk V Sithambaram, however, described Najib as “wilfully blind”, since a reasonable person would have made inquiries to allay suspicions over the source of the funds.

He pointed out that the additional RM42 million should have raised suspicions, given that Najib had already returned US$620 million out of US$681 million of the purported donation.

The balance of the money retained by Najib, meanwhile, had already been exhausted by June 2013. Therefore, Sithambaram stressed that it was unreasonable for Najib to believe that there were still "donation" funds for him to spend.

Moreover, he maintained it was impossible for Najib to not have seen his bank statements over a period of five years given the significant amount of monies being deposited into his accounts.

Najib’s lawyers argued that Low, with the help of Nik Faisal and the "rogue bankers" of AmBank, including Yu, had "actively removed" suspicion by keeping Najib's bank statements away from him and moving funds into his accounts without his knowledge.

"Datuk Seri Najib was a victim of a scam by the likes of Jho Low, Nik Faisal and rogue bankers like Joanna Yu and other senior management of SRC," said Najib's lead counsel Tan Sri Muhammad Shafee Abdullah.

Further driving the argument that Najib had no knowledge of the movement of funds, Harvinderjit also submitted that Low acted in a reactionary manner whenever funds had to be deposited into the accounts, often after cheques were issued by Najib.

The prosecution, however, insisted that Low, Nik Faisal, as well as the late Datuk Azlin Alias — Najib’s principal private secretary — had acted under the former premier's instructions.

Low did not act "behind the scenes", Sithambaram argued, as the businessman’s actions indicated his full knowledge of Najib's spending patterns. In fact, on several occasions, Low took proactive steps to ensure there were sufficient funds in Najib’s accounts, he said, highlighting one particular time when Low contacted Yu to ensure that a credit card payment by Najib would go through.

Sithambaram was referring to a payment by Najib in Honolulu, Hawaii, in December 2014, which did not go through because of a credit card system issue. Low informed Yu through BlackBerry Messenger that he received a message from "MNR" — referring to Najib — that the transaction had not gone through.

Earlier in May 2014, there was another exchange between Low and Yu, where the former asked the latter to check the status of one of Najib's accounts to see if it was overdrawn as "boss wrote a big cheque".

"Jho Low was not reactionary in funding the accounts, rather he was a visionary," said Sithambaram. And given the millions of ringgit he had received, Najib could hardly be seen to be a victim, he added.

Sithambaram pointed out that over a six-month period of September 2014 to February 2015, Low had transferred RM86 million — including RM42 million of SRC money — to Najib’s bank accounts to cover the politician’s expenditure as well as cheques written by him.

During cross-examination, Najib admitted to some communication between himself and Low, although he said that most of the communication was done through Azlin. He also explained that he had removed Nik Faisal from the post of CEO, following complaints by then SRC chairman Tan Sri Ismee Ismail of Nik Faisal’s financial misconduct.

However, the prosecution pointed out that despite Nik Faisal’s termination as CEO, he was retained on the SRC board and kept as a signatory to the company's bank accounts, which Sithambaram said allowed Najib to continue to call the shots. And, furthermore, he was maintained as the mandate holder of Najib's AmBank accounts. Nik Faisal remains in hiding.

Over the five days of submissions, the defence raised a multitude of arguments against the prosecution's case, which were subsequently rebutted, resulting in over 2,000 pages of submissions before High Court judge Mohd Nazlan Mohd Ghazali, who will render his verdict on July 28.



Najib misunderstood and unfairly judged, says defence

In the court of public opinion, former prime minister Datuk Seri Najib Razak is guilty of misappropriating RM42 million of SRC International funds, lead defence lawyer Tan Sri Mohammed Shafee Abdullah conceded last week.

It had been an uphill task to defend him, as being a public figure and a man of immense power, he is subject to prejudice, Shafee said in his oral submission last week.

Shafee and his team painted Najib as a man who, although powerful, had been the victim of an elaborate scam by “rogue bankers” and others whom he had trusted (see “Was Najib a victim or protagonist in the conspiracy?”).

Defence lawyer Farhan Read said Najib was none the wiser of the monies coming into his accounts as bank statements were deliberately kept from him.

“We are not beneficiaries of (millions of ringgit) donations; we don’t have under our belt the weight of the concerns of this country. Unlike us, Najib had no time to keep track of his funds,” he said of the former prime minister, who had also taken on the finance portfolio.

“How do we impose on him our understanding of things, when he comprehended it in a whole different sphere, being a prime minister at that point in time,” Farhan stated.

Shafee added that it would be easy for everyone, including the court, to believe that Najib had committed the offences when in actual fact he was a victim of circumstance and a scam.

“It’s easy for anyone, even the court, to be so fortified in this belief. The circumstances around this make the defence harder for Najib [than] for a common man.

“Perhaps, in a way, an open mind should be had in relation to our defence … because public prejudice is everywhere, running this defence is not an easy one,” remarked the high-profile lawyer.

Appointed prosecutor Datuk V Sithambaram told the High Court that the evidence demonstrated otherwise. He asserted that Najib had absolute knowledge of the money in his accounts as it was absurd not to know that millions of dollars were in his accounts.

“Ordinarily, even if a multimillionaire said he did not know that RM42 million came into his accounts, he would be laughed at,” Sithambaram told Judge Mohd Nazlan Mohd Ghazali.

Shafee and his team also questioned the element of graft as Najib only received the RM42 million between Dec 26, 2014 and Feb 10, 2015, about three years after SRC had received two loans from Kumpulan Wang Persaraan (Diperbadankan) (KWAP) — RM2 billion in 2011 and another RM2 billion a year later.

“He was such a powerful man; if you say he did receive this gratification, then why didn’t he get it immediately? Was this the pathology of corruption? Where the most powerful man in the country is accused of wanting gratification, corrupt gratification, and apparently he got SRC a RM4 billion loan, and for that [he was] rewarded RM42 million, obtained 3.5 years later?” Shafee pointed out.

If Najib was really corrupt, he would have taken the RM42 million as and when or before the loan was granted, he added.

Sithambaram rebutted by saying regardless of when Najib received the RM42 million, it was still an act of graft.

Interestingly, the defence deliberately chose not to use Najib’s time on the witness stand in its oral submissions as it claimed the prosecution had used Najib’s testimony to create a new pivot in its case. “What has happened is the prosecution has tailored its case to the defence’s explanation.” The defence also argued that Najib had not abused his power in fast-tracking the issuance of the government guarantees (GG) and disbursement of funds, in relation to the RM4 billion KWAP loan, insisting he had merely made a “suggestion”.

However, Sithambaram submitted that Najib’s note to KWAP’s former CEO Datuk Azian Mohd Noh, on SRC letterhead on June 3, 2011 that he supported SRC’s request for a loan of RM3.95 billion, was a directive as KWAP was a unit under the Finance Ministry.

He also pointed out that SRC’s early drawdown in its entirety of the first RM2 billion KWAP loan signed off by Najib — even before a government guarantee was given — revealed Najib’s awareness of what was going on, despite his claims of being a victim of a conspiracy. Furthermore, it underscored his actual influence in the matter.

The defence contended that the prosecution had not proven its case beyond a reasonable doubt. The prosecution maintained it had shown ample evidence of Najib’s guilt on all seven charges. On July 28, Judge Mohd Nazlan will announce whether he agrees with the court of public opinion.


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