KUALA LUMPUR (Sept 3): The High Court on Thursday has heard that imprisoned former prime minister Datuk Seri Najib Razak was at the helm of SRC International Sdn Bhd, leaving his mark on key decisions — from the company's creation to the misuse of its funds.

Wrapping up its case against the ex-PM, SRC lawyer Kwan Will Sen said that despite raising RM4 billion from Retirement Fund Incorporated (KWAP), none of the company's objective of procuring alternative natural resources for the country was achieved.

He highlighted that the KWAP loan — two loans of RM2 billion each — was backed by government guarantees "personally procured" by Najib as the then-PM and finance minister.

"SRC was a victim of a systematic fraud. It defaulted entirely on its loans, leaving the Malaysian government, and ultimately the rakyat, to bear the consequences. Of the monies lost, RM42 million reached the personal accounts of Najib," he said.

Kwan stressed that at the material time, Najib served quadruple roles, which resulted in a strong grip on the company.

He said that at the material time, Najib was PM, finance minister, the controlling mind of MOF Inc (SRC's sole shareholder) and the company's adviser emeritus.

"He appointed SRC's board. He appointed the managing director. He procured KWAP loans before the Board was even constituted. The former directors were accustomed to acting on his directions, conveyed through his proxy (former chief executive officer) Nik Faisal (Ariff Kamil) or through shareholder resolutions,” Kwan said.

Nik Faisal remains a fugitive, having absconded the country.

Kwan was submitting on SRC and its subsidiary Gandingan Mentari's civil suit to recoup RM42 million of company funds, which were misappropriated and had gone into Najib's bank account between December 2014 and February 2015,

Specifically, SRC is suing Najib for knowingly receiving of trust property, breach of fiduciary duties as shadow director, and tort of misfeasance in public office.

The RM42 million in the civil suit is the same as in the SRC criminal case, for which the ex-PM is currently serving his prison sentence after the courts found and upheld that he was guilty of criminal breach of trust, money laundering, and abuse of power.

It is SRC's case in this civil suit that Najib was its shadow director and owed fiduciary duties to the company.

Najib however has denied this, countering that it was the company's directors who looked at the nitty gritty of managing of the company, and his role was only limited to providing overarching guidance.

Najib has also brought in former directors as third-party defendants in this suit.

Among the third-party defendants are: Datuk Suboh Md Yassin, Datuk Mohammed Azhar Osman Khairuddin, Datuk Shahrol Azral Ibrahim Halmi, Tan Sri Ismee Ismail and Datuk Che Abdullah @ Rashidi Che Omar.

Najib's counsel Muhammad Farhan Shafee argued that the suit was time-barred as it was filed in on May 7, 2021, over allegations which happened between Dec 26, 2014, and Feb 10, 2015.

Farhan argued that at the latest, the last date to consider for the statute of limitation is Feb 10, 2015. Generally, civil claims in the peninsular are commonly filed within six years from the rise of the grievance. 

He said that the plaintiff's claim — that the time does not run until SRC's new management “discovered” the misappropriation in 2019 — cannot stand.

This is because there was no evidence put forth during the trial to show how the new management discovered the evidence or precisely when they found out. Moreover, Farhan highlighted that there was no testimony from the 2019 company members on the issue of discovery of the misappropriation.

Submissions before High Court judge Datuk Raja Ahmad Mohzanuddin Shah Raja Mohzan continues on Friday.