This article first appeared in The Edge Financial Daily on May 9, 2019 - May 15, 2019

KUALA LUMPUR: The unrelenting questions from the defence in Datuk Seri Najib Razak’s SRC International Sdn Bhd trial over a non-disclosure provision in the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (Amla) to a witness from Bank Negara Malaysia (BNM) caused tempers to flare at the High Court yesterday.

The former prime minister was not notified about the questionable activities in his AmBank account that were unearthed after a 2015 raid at the AmBank Jalan Raja Chulan branch due to a provision in the Act, namely Section 14, which prevents the bank or any party with knowledge of suspicious transactions from tipping off the customer.

Stiff penalties, in the form of a fine not exceeding RM3 million, a jail term of not more than five years, or both, await violators of the anti-disclosure clause.

Responding to questions from Najib’s lead counsel Tan Sri Muhammad Shafee Abdullah, BNM investigating officer Ahmad Farhan Sharifuddin said the section prohibited warning the customer whose account is engaged in suspicious transactions.

“Do you agree that if AmBank had noticed suspicious transactions and alerted BNM, my client would have been equally alerted that there was something wrong with the account?” asked Muhammad Shafee. “I don’t understand,” said Ahmad Farhan.

Muhammad Shafee repeated the same question despite the investigating officer maintaining his position on why the account holder was not notified, Muhammad Shafee continued to ask the same question.

“I put it to you that if AmBank had done its job and reported the suspicious transactions, my client Datuk Seri Najib would have been alerted and this whole matter would have been avoided,” said the lead defence counsel. “I have no idea,” responded Ahmad Farhan to an increasingly frustrated Muhammad Shafee.

Lawyer Harvinderjit Singh then took over the cross-examination, continuing to interrogate the witness on the same issue, leading to a heated exchange between the two.

“Come on sir, you are from the central bank. You are also the competent authority. It’s quite simple. There is a suspicious transaction and there is an investigation of the suspicious transaction. Are you trying to tell this court that the account holder will not be notified?” asked the lawyer. “I have no idea, really, because …” said Ahmad Farhan before he was interrupted by Harvinderjit who said he refuses to accept that answer.

Harvinderjit then pointed out a section of the Act which relates to the overruling of the anti-disclosure provision and then pointed to another section which he said allows the competent authority to interview any customer of the reporting institution.

“Under examination of [the] reporting institution is the power of the competent authority to examine the reporting institution. That is Section 25. And now Section 26 allows the competent authority, the investigating party to interview any customer of the reporting institution, correct?” asked the lawyer. “Yes,” responded Ahmad Farhan.

“Examination does not mean investigation”

Just as Harvinderjit was about to carry on, a very agitated Ahmad Farhan interrupted him saying: “No, wait, we are talking about examination here! It does not mean investigation, my learned counsel!” followed by roaring laughter among the attendees in the court.

Even Najib was amused by the heated argument, as well as Justice Mohd Nazlan Mohd Ghazali who was seen smirking.

“My part comes in only when the offence is already committed. This is a different thing! Don’t confuse yourself! Examination and investigation is different,” said Ahmad Farhan. The lawyer then ended his cross-examination.

Earlier in the day, Kumpulan Wang Persaraan (Diperbadankan) (KWAP) former assistant vice-president Amirul Imran Ahmat was called to the stand.

During cross-examination, Harvinderjit suggested that in order to prove that SRC was violating the terms of the utilisation of funds, which were earmarked for investment in natural resources as well as for working capital purposes, one needs to prove that the funds granted — and not any cash generated from investment activities — were used for other purposes.

Amirul agreed with the lawyer, who then asked him whether it was possible to trace the origins of the money used.

“It’s not my job, but it can be done,” says Amirul. “This can be done with a forensic accounting report?” asked Harvinderjit. “Yes, among others,” responded Amirul.

Deputy public prosecutor (DPP) Datuk Ishak Mohd Yusoff then carried on with a re-examination of Amirul’s statements.

He referred to an email sent by Amirul to former SRC chief executive officer Nik Faisal Ariff Kamil, in which the former had requested for more details to assess and grant a RM2 billion loan, which was not provided by SRC.

He asked whether there were any other companies that have been granted loans without furnishing the required information during Amirul’s tenure at the fund.

“To my knowledge, no other company had done this,” he responded. “So if the additional details are not disclosed, the loan will not be granted?” asked the DPP. “Yes,” said Amirul.

In the latter half of the day, the prosecution called its 31st witness, Maybank Kuala Lumpur main branch assistant manager Halijah Abdul Wahab.

She testified about multimillion-ringgit transactions involving accounts belonging to Putra Perdana Construction Sdn Bhd, Putra Perdana Development Sdn Bhd, its subsidiary Permai Binaraya Sdn Bhd, SRC, and Najib.

The largest of these transactions involve RM140 million from an undisclosed source which was transferred to Putra Perdana Development, then Putra Perdana Construction, and eventually SRC in Dec 2014.

Najib faces seven charges of criminal breach of trust, abuse of position and money laundering involving RM42 million belonging to SRC.