KUALA LUMPUR (May 6): Former 1Malaysia Development Bhd (1MDB) chief executive officer (CEO) Datuk Shahrol Azral Ibrahim Halmi told the High Court here Monday that he has no knowledge as to why the government dropped him as a defendant in 1MDB subsidiary SRC International’s US$1.18 billion (RM5.64 billion) civil suit against former prime minister Datuk Seri Najib Razak and the company's former chief executive officer Nik Faisal Ariff Kamil.

Testifying as a third party in this trial, Shahrol, who was being cross-examined by Najib’s lawyer Harvinderjit Singh, said that he had not made a deal with the government to drop the suit against him, adding that he was not given a reason as to why it was dropped.

Initially, the suit also named former 1MDB director Tan Sri Ismee Ismail, and former SRC directors Datuk Mohammed Azhar Osman Khairuddin, Datuk Suboh Md Yassin and Datuk Che Abdullah @ Rashidi Che Omar, as defendants.

Though they were later dropped from the case, Najib brought them back again as third parties. A defendant can seek to do so in order to claim contribution, indemnity or any remedy which is claimed by the plaintiff.

Harvinderjit: This present case was filed in 2021, notice was served to you and then we have a discontinuance where the suit was dropped against you.

Shahrol: Yes.

Harvinderjit: Was there a resolution between you and the government?

Shahrol: No.

Harvinderjit: Then why did they drop the suit against you?

Shahrol: I don’t know.

Harvinderjit: You didn’t ask them?

Shahrol: No.

When asked by Harvinderjit if it was because he had testified in Najib’s 1MDB-Tanore criminal trial as a prosecution witness, Shahrol said: “I don’t have knowledge about that.”

Previously in 2020, while testifying in the 1MDB-Tanore trial, Shahrol had also denied making a deal with the Malaysian Anti-Corruption Commission (MACC) and the government to testify against Najib to avoid criminal charges.

During this SRC trial, Shahrol had also previously stated that he had never been arrested by the authorities for SRC- and 1MDB-related crimes. He was only restricted from travelling out of the country from July 2018 until early 2020.

SRC is suing Najib and Nik Faisal (who is currently at large) over a RM4 billion Retirement Fund Inc (KWAP) loan given out to SRC in two tranches — one in the second half of 2011, and the other in the first half of 2012. SRC filed the suit in May 2021.

SRC alleges that Najib, who was SRC’s emeritus adviser from May 1, 2012, until March 4, 2019, had abused his power and obtained personal benefits from SRC’s funds as well as misappropriated the funds. SRC, which is now wholly-owned by Minister of Finance Inc, wants a declaration from the court that Najib is liable for the company’s losses due to his breach of duties and trust.

SRC claimed that out of the total KWAP loan of RM4 billion, RM3.6 billion was immediately transferred out when the funds came into SRC, of which US$120 million ended up in Najib’s bank account.

Hence, SRC is also seeking an order that Najib pays the US$1.18 billion (RM3.6 billion) in losses it suffered, and damages for breach of duties and trust, including an order that Najib compensates the company for the sum of US$120 million that allegedly went into his bank account.

SRC has obtained a judgement in default against Nik Faisal, who was named as Najib’s proxy, in the civil suit.

Najib, meanwhile, has been jailed since Aug 23, 2022. He was sentenced to serve a 12-year jail sentence and fined RM210 million after being convicted of misappropriating RM42 million of SRC's funds. But his jail sentence was recently reduced to six years, while the fine was cut to RM50 million by the Pardons Board.

The trial will continue on Wednesday before High Court judge Datuk Ahmad Fairuz Zainol Abidin.