KUALA LUMPUR: The High Court here today held that former prime minister Datuk Seri Najib Tun Razak had enormous influence and wielded an overarching position of power in SRC International Sdn Bhd, and the prosecution has succeeded in establishing there was a criminal breach of trust (CBT) by Najib over funds of the company.
Justice Mohd Nazlan Mohd Ghazali in his judgment said Najib was not only the then finance minister heading the MOF Inc, the sole shareholder of SRC and 1Malaysia Development Berhad (1MDB), but also the then prime minister vested with the authority under the articles of the SRC to appoint and dismiss directors of the company and to whom certain reserved matters including amendments must be referred.
“As the prime minister and head of MOF Inc, the accused also caused the introduction of a new article 117 to appoint himself as an advisor emeritus of the company, to whom advice on strategic matters concerning SRC must be referred,” he said.
The judge said the point to note is those decisions were taken because of the directors’ stance which construed the resolutions from the shareholder, who was also the prime minister and later advisor emeritus of the company, as a form of instructions or otherwise as matters that they should follow.
The judge said the court also found that the accused had the entrustment with dominion over the property of SRC.
He said the accused’s control over all matters SRC is all-embracing, adding, “SRC is only a private limited company but it was no ordinary company.”
The judge said as the finance minister, the accused in the capacity as MOF Inc, was the sole shareholder of SRC.
“The various shareholder resolutions of the MOF Inc were followed by and formed the basis of many of the directors’ resolutions of SRC.
“As the prime minister, the accused was named in the articles of the company as the only person empowered to appoint or dismiss any member of the board of directors of SRC,“ the judge elaborated over the three CBT charges faced by Najib.
He said the accused dictated the direction of SRC from the time of its incorporation, given his roles as stated in the articles.
Justice Mohd Nazlan said Najib’s other roles as the director as defined under Section 402A of the Penal Code and as the advisor emeritus all made him an ‘agent’ under the act.
“I accept that the evidence by PW39 (Tan Sri Ismee Ismail who was a member of SRC’s board of directors) and PW42 (former non-executive director of SRC Datuk Suboh Md Yassin) include their assertions that as directors of the company, they were aware of their statutory and fiduciary responsibilities and had acted in the best interest of the company.
“I do not find this to negate the fact that instructions had been made by the accused to the directors of SRC. After all, PW39 testified that he did not construe following the instructions of the accused to conflict with his director’s fiduciary duties. And the substance of the various instructions was in fact followed by the directors of SRC,” he added.
The judge said the crucial ability of the accused as the shareholder to have convinced - via his position as MOF Inc given his status as the prime minister and the finance minister - the directors of SRC to adhere to important decisions such as on the deposit of the bulk of the company funds overseas could not be emphasised enough.
He said the fact that the accused dealt with matters which are legally within the purview of directors instead of the shareholders in one thing, but the adherence by the directors was not unexpected because the decisions of the shareholder were furnished by no less than the prime minister and finance minister of the country to the chairman of an entity wholly-owned by MOF Inc, that was SRC.
In relation to the three money-laundering charges, Justice Mohd Nazlan held that the RM42 million proceeds in his accounts were originated from unlawful activity, as established in the CBT charges.
“In my assessment, evidence shows that in respect of the three CBT charges, the misappropriation occurred at the point when the funds of RM42 million or any larger part thereof was transferred out of SRC, such as when the RM42 million was transferred into Gandingan Mentari Sdn Bhd’s bank account. (This means) even before the accused received the funds in his accounts, an offence of CBT was already complete,” he said.
“I find it that the accused knew that the RM42 million was proceeds of unlawful activity or in the best case for the defence, the accused failed without reasonable excuse to take reasonable steps to ascertain whether or not the RM42 million was the proceeds of unlawful activity,” he said.
The judge further said: “There is no evidence showing inquiries made by the accused or any police report or complaints to the bank despite having been told by Ihsan Perdana Sdn Bhd (IPSB) managing director Datuk Dr Shamsul Anwar Sulaiman and CEO of Yayasan Rakyat 1Malaysia Ung Su Ling on the transfers.”
“The evidence from lawyer Ranjit Singh also clearly admitted that the accused had knowledge of the RM42 million originated from SRC. Accordingly, when the RM42 million finally flowed into the accused’s accounts, it could already be construed as proceeds of unlawful activity,” the judge said.
Justice Mohd Nazlan said as such, all ingredients of the money laundering offences under Section 4(1)(b) of the Act in the three charges have been proven.
Wrapping up his judgment, Justice Mohd Nazlan said the prosecution has successfully adduced credible evidence proving each and every essential ingredient of the offences of abuse of position for gratification, criminal breach of trust and money laundering as framed in the charges, in relation to any of which, if unrebutted or unexplained, would warrant a conviction.
“A prima facie case has therefore been made out against the accused in respect of each of the single charge of use of position for gratification, the three CBT charges and three money laundering charges within the meaning of Section 180 of the Criminal Procedure Code.
“As such, I now call upon the accused to enter his defence in respect of all the seven charges,” he said.
Justice Mohd Nazlan said the accused now has three options which he must choose from - to give a sworn evidence in the witness box where he will be subjected to cross-examination; to give an unsworn statement from the dock where he cannot be cross-examined; or to remain silent, in which case the court must proceed to convict him.
Najib chose to give his evidence under oath from the witness stand where he will be cross-examined.
The judge confirmed that the next trial dates will be as previously scheduled – on Dec 3 to Dec 4, Dec 9 to 12, and Dec 16 to 19.
Najib’s lawyer Tan Sri Muhammad Shafee Abdullah informed the court that the defence team would be filing an application to seek for a list of witnesses that the prosecution had not offered but who had their statements recorded.
“We will also apply to obtain the statements that all witnesses in the case had recorded with the Malaysian Anti-Corruption Commission or the police,” he said, adding that they wanted such documents to be provided before the trial resumes on Dec 3.
Datuk V. Sithambaram, of the prosecution team, said the prosecution would raise objections for them to supply the list of the witnesses. However, he said they will respond accordingly to the defence’s application.
The court then fixed Friday for the hearing of the application.
