KUALA LUMPUR (June 10): SRC International Sdn Bhd's former chairman Tan Sri Ismee Ismail said he would not refuse then prime minister Datuk Seri Najib Razak's instructions to the company, the High Court heard on Monday.
This was particularly so, given that Najib, who held the positions of prime minister and finance minister at the time, was also the person who had the final say in appointing the company's directors.
Ismee said this in reply to lawyer Chong Yik Loong, adding that for some time, there were no grounds to suspect or question whether the prime minister was not acting in favour of SRC.
Chong: The Ministry of Finance consists of the finance minister [Najib], who was also the PM at that time and the person who appointed you as director and chairman. [Under SRC's memorandum and articles of association (M&A), Najib] has the final say [in the] appointment of SRC's directors. Under such circumstances, in reality, [did] it ever cross your mind that you can refuse his instructions?
Ismee: I won't refuse [his instructions]. I believed that he was trying to do something [that was the] best for the country and SRC. That's the reality.
Chong also zeroed in on Ismee's testimony last week, where he said he was furious at SRC's former chief executive officer Nik Faisal Ariff Kamil over the company's failure to submit its accounts for the financial year 2013.
Ismee said that although the board had signed off on the accounts, the management had failed to file them. He added that he had only learned of the management's oversight from a May 2014 article published by The Edge.
The article stated that the company had failed to submit its accounts for the financial year ended March 31, 2013. According to the report, the accounts were supposed to be submitted to the Companies Commission of Malaysia by October 2013.
On Monday, Chong asked if, up until May 2014, there had been any grounds to be suspicious that anything was amiss, to which the 59-year-old replied in the negative.
"Yes, no grounds to suspect," Ismee answered.
Chong is representing former SRC CEO Datuk Shahrol Azral Ibrahim Halmi, who is a third party in the company's lawsuit against Najib.
'I respect, trust and admire Najib'
When asked, Ismee testified that even around 2015 and 2016, when the 1Malaysia Development Bhd (1MDB) scandal had been highlighted by the press, Najib had not called or questioned him on his (Ismee's) purported failure to discharge his fiduciary duties as an SRC board member.
Ismee also testified that he "respected, trusted and admired" Najib and would have liked to contribute to the success of proposed ventures, particularly with regards to government-to-government (GTG) deals.
"The PM had decided on a GTG venture with Aabar Investments PJS, the board would like to contribute to [its] success," he said of the venture that never took off under SRC.
Ismee also reiterated that the Retirement Fund Inc (KWAP) loan which was given to SRC had already been approved even before he became a board member of the company on Aug 1, 2011.
SRC's lawyer P Gananathan asked Ismee if he had been surprised by this during his first board meeting.
"I guess it was a pleasant surprise," Ismee said, adding that he assumed that the necessary due diligence had already been done.
This civil case revolves around a RM4 billion KWAP loan which was given in two tranches in the second half of 2011 and first half of 2012 to SRC. This is separate from the SRC criminal case which Najib has been imprisoned for.
SRC filed the RM4 billion suit against Najib and Nik Faisal in May 2021. Initially, the suit also named Ismee, Shahrol, and SRC directors Datuk Mohammed Azhar Osman Khairuddin, Datuk Suboh Md Yassin, and Datuk Che Abdullah @ Rashidi Che Omar as defendants.
They were dropped later, only for Najib to bring them back again as third parties. A defendant can initiate this against a third party who is not part of the main suit, in order to claim contribution, indemnity or any remedy which is claimed by the plaintiff.
SRC claims that out of the total KWAP loan of RM4 billion, a sum of RM3.6 billion was immediately transferred out when the funds came into SRC, of which a sum of US$120 million had eventually ended up in Najib’s bank account.
The trial before High Court judge Datuk Ahmad Fairuz Zainol Abidin continues on Thursday (June 13).