Najib’s SRC Trial: Day 21

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Najib had ultimate power to “hire and fire” any of the SRC board of directors.

8.52am: Attorney-General Tommy Thomas enters the courtroom and takes a seat at the front with other members of the prosecution team.

Former prime minister Najib Razak’s defence counsel Harvinderjit Singh is also seen conferring with other members of the defence team in preparation of resuming cross-examination of former Retirement Fund Inc (KWAP) CEO Azian Mohd Noh.

Azneal Ishak/Malaysiakini

8.58am: Wearing a beige suit, Najib enters the court and takes a seat at the front row of the public gallery to await the beginning of proceedings.

Azneal Ishak/Malaysiakini

Also seen entering the courtroom is his lead defence counsel Muhammad Shafee Abdullah.

9.13am: Najib enters the dock as judge Mohd Nazlan Mohd Ghazali prepares to get proceedings underway.

9.20am: Azian is called to the stand and defence counsel Harvinderjit Singh proceeds to cross-examine the witness.

9.25am: Harvinderjit asks about the role of the Treasury within the Finance Ministry.

Azian says she is not aware of the decision to transfer ownership of SRC International from 1MDB to the Finance Ministry.

She affirms the KWAP investment panel approved of the change of ownership in 2012.

Azian confirms the recusal of Wan Abdul Aziz and the KWAP investment panel in the matter of the transfer of ownership. She declines to comment on its meaning.

Wan Abdul Aziz was also then-secretary-general of the Treasury.

9.40am: Harvinderjit refers to a letter wherein SRC International informed KWAP that the Finance Ministry had on February 16, 2012, approved the government guarantee.

Azian says it is beyond her knowledge how the government guarantee came about.

She agrees the advice letter is a statement from the ministry to indicate it had agreed that SRC could apply for a loan from KWAP and that it did not amount to a directive.

SRC obtained RM2 billion loan from KWAP in late 2011, and another RM2 billion loan the following year.

10am: Azian says for the second loan of RM2 billion, a request was included in an investment paper to require SRC to provide quarterly reports on its investment.

Azian: Additional facility was requested to be disbursed in one lump sum. There was concern.

Azian agrees with Harvinderjit that three KWAP investment panel members did grant approval for the additional loan facility of RM2 billion and that it should be disbursed in one lump sum.

10.20am: Azian testifies that she does not remember what transpired in a March 22, 2012 meeting with then-prime minister Najib.

Azian says this when Harvinderjit refers to the meeting as stated in an email exchange between her and then-SRC International director Nik Faisal Ariff Kamil.

The email exchange concerns the RM2 billion KWAP loan to SRC International being disbursed in one lump sum rather than being staggered.

Harvinderjit: This email speaks of a meeting on March 22, 2012, between you, the chairperson of KWAP, the head of Treasury, and the deputy Treasury secretary-general with the then-finance minister cum prime minister Najib?

Azian: Yes.

Harvinderjit: You remember the meeting?

Azian: I remember attending the meeting, but I do not remember in detail the discussion that transpired in the meeting.

Harvinderjit: You did not take any notes during the meeting?

Azian: No.

10.30am: Harvinderjit asks Azian where she stands on SRC utilising KWAP funds for corporate social responsibility purposes.

Azian: There are bound to be business expenses that has to be incurred by the borrower. I cannot put into detail what is allowed and what is not allowed.  If it’s a business expense, I’m very sure it is allowable.

10.45am: Azian insists that she articulated a contentious paragraph in her witness statement on the RM4 billion in loans given to SRC International herself.

She denies Harvinderjit’s suggestion that the paragraph in question was prepared by authorities, as it reads similar to statements from previous witnesses from KWAP.

Paragraph 56 of Azian’s witness statement reads: “In my experience in working with KWAP, both loans to SRC totalling RM4 billion were among the biggest loans agreed to by KWAP.”

Azian: I articulated the words myself.

Harvinderjit: Then you articulated the words to (KWAP vice-president of legal and secretarial affairs) Azlida Mazni Arshad too?

Azian: No.

Azlida, the 35th witness, had previously testified that the RM4 billion in loans were among the largest ever given out by KWAP.

Harvinderjit concludes cross-examination.

10.55am: Deputy public prosecutor Ishak Mohd Yusoff re-examines Azian.

Ishak asks Azian to define what she meant by “compulsion” and what she meant by “influence” in her testimony, regarding an advice letter from the Finance Ministry.

Azian: There’s no legal compulsion but I cannot say the same that there was no influence. The letter came from the finance minister, the prime minister, the minister in charge of KWAP. He is my ultimate boss. I cannot deny there is a certain amount of influence.

11.10am: Shafee stands up to respond to Azian.

Shafee: Was this influence, if there was ever one, self-induced?

Azian: Whether I was compelled or whether I was influenced, so I was replying to that question…I do not think it was a strange reaction when they get such a request from their superior.

Hasnoor Hussain/TMI

Shafee: As a responsible CEO of KWAP, would you have allowed KWAP to make a wrong decision based on that issue of influence?

Azian: As a CEO my fiduciary duty is to protect KWAP and to ensure they don’t suffer loss from their investments. The influence I am speaking of would be to facilitate the process of the loan.

Shafee: I’m putting it to you that you would not have made that sort of decision that is contrary to the interests of KWAP based on that hierarchy of influence.

Azian: Whatever influence, whatever I perceived definitely. I would not be doing something that would breach any law or any act.

Azian is released from the stand

The court takes a 10-minute break.

11.40am: The 39th witness, former Tabung Haji CEO Ismee Ismail takes the stand.

Ismee says he became a non-executive director at 1MDB in 2009. He says he was appointed to the post by Najib.

Azneal Ishak/Malaysiakini

11.57am: Ismee says he was nominated by Najib, along with four others, to sit on the SRC board.

He says SRC CEO Nik Faisal was responsible for the daily operations of the company and Najib, who was then prime minister was “adviser emiritus” to SRC.

Ismee says of the RM4billion loan from by KWAP, RM40 million was used to buy property, which was sold to an SRC subsidiary named Gandingan Mentari.

Ismee says Gandingan Mentari was run by Nik Faisal, who was a director, and Suboh Yassin. The company was formed to manage the property in Bukit Jalil.

Ismee says he stepped down as SRC director on May 6, 2014, and officially left the company on August 15, 2014, and that he did not work during the intervening period.

He says he resigned his position because he did not agree with the way Nik Faisal was handling the company’s finances and accounts.

He says most of SRC’s actions were carried out by Nik Faisal, but the board of directors also had to get the advice of Najib if it was to undertake any decisions.

Ismee says the board did not have direct communications with Najib and that Nik Faisal acted as the “link” between the two.

He says he brought up issues about the daily running and governance of SRC, but Nik Faisal would always reply that decisions were discussed and finalised by the government.

Ismee: In my opinion, the government that Nik Faisal was referring to was Najib.

Hasnoor Hussain/TMI

He adds that Najib had the ultimate power to “hire and fire” any of the SRC board of directors.

12.20pm: The first meeting by the SRC board of directors already discussed securing a loan from KWAP.

Ismee, who chaired the 2011 meeting, tells DPP Ishak that its agenda was based on a directive from 1MDB – a shareholder of SRC at the time.

Ishak: Did you attend the first SRC board of directors meeting in August 2011?

Ismee: Yes, I did.

Ishak: Can you explain why the first meeting included a discussion on (securing a) loan?

Ismee: The proposal was presented by (SRC) management for us to accept a loan from KWAP with government guarantee at the time. There was an order from a shareholder.

Ishak: Can you tell who was the shareholder then?

Ismee: At that time it was 1MDB.

According to Ismee, the Minister of Finance Incorporated was a shareholder in 1MDB, and that then-finance minister Najib usually signed its orders.

The witness also states that SRC was later put directly under MOF Inc in February 2012.

12.45pm: The defence team objects to the tendering of minutes of a purported 2011 meeting between Najib and Nik Faisal, claiming that it is a fake document.

Harvinderjit cites the “dubious” circumstances surrounding the document, including the date of its surrender to the MACC being unknown.

“He (Ismee Ismail) is not the maker (of the document), (this is) secondary evidence, he said it is a given copy,” the lawyer tells the court.

“We object as we were given the document as late as May 2019. This was given to the MACC at an unknown date, and not given to us.

“The circumstances of this document are dubious. We are of the view that this is a fake document…unless my learned friend admits to marking of evidence.”

In response, DPP V Sithambaram says that all the documents were seized by the MACC and that the very existence of the meeting minutes means that it can be marked as evidence.

Sithambaram adds that the defence can still challenge the validity of the minutes at a later time.

The minutes are believed to contain discussions between Nik Faisal – who is still missing – and Najib over several matters concerning SRC’s operations during the meeting on Sept 7, 2011.

According to Ismee, this includes SRC’s line of reporting to Najib as the then-premier.

Ismee also testifies to the court that the contents of the minutes were briefed to SRC’s board of directors during a Sept 13, 2011 meeting, and were incorporated into its own minutes.

However, the witness also agrees to a suggestion by Ishak that only Nik Faisal and Najib would be able to verify the contents of the Sept 7 meeting minutes.

1.03pm: Proceedings break for lunch, and will resume at 2.30pm.

2.37pm: Court is back in session with Ismee taking the stand to continue his examination.

2.45pm: DPP Sithambaram argues against the prosecution’s claim that a document submitted as evidence is fake. The document contains the minutes of a purported SRC’s board of directors’ meeting between Nik Faisal and Najib.

2.50pm: Harvinderjit asks for the witness to be excused before he makes his submission that the document is fake.

3.32pm: Judge Nazlan says that until the authenticity of the minutes is verified by the MACC, they cannot be used for now.

3.34pm: Ismee is brought back into the court to continue his examination by the DPP. He is asked to verify the minutes of the meeting of SRC’s board of directors.

3.38pm: He is asked about a special meeting that took place. He says usually, special meetings are called due to urgent matters or because a meeting has not been scheduled.

4.03pm: Ismee says that Najib was the chairman of the 1MDB’s board of advisers.

The court then takes a 10-minute recess.

4.20pm: Court resumes after recess.

Ismee is asked to verify minutes from the SRC’s board of directors’ meeting.

4.35pm: Ismee testifies that the entire SRC board visited BSI Switzerland (now EFG) headquarters in Lugano in September 2013 to make sure its funds were still with the bank.

Ismee tells Ishak that the board – himself, Suboh Yassin, Che Abdullah @ Rashidi Che Omar, Shahrol Azral Ibrahim Halmi, and Nik Faisal Ariff Kamil – wanted to talk to the top management of BSI.

Ishak: In September 2013 (referring to SRC minutes for that year), you went to Switzerland?

Ismee: Yes, the whole board of directors (of SRC) went, including Rashidi, Suboh and Nik Faisal.

Ishak: This was initiated by the shareholder?

Ismee: I think it was initiated by management. If there was shareholder agreement, I do not know. The issue of the funds in BSI kept arising, so we went there and met the senior management of the bank in Lugano. Before this the management only had stories about BSI, so we went there, and were assured that our money was safe and secure at BSI. BSI is a big bank in Lugano, I was comforted.

Ishak: Why was it important to confirm that the money was in BSI?

Ismee: To ensure the money is still there, it was very important for us to confirm that. To be assured that our funds were still there, deposited in the bank.

Ishak: How did you know the money was actually there?

Ismee: They (BSI management) did not actually show us the money. We had a meeting with their senior officers, I think their president. I cannot remember their exact names, they gave us an explanation on the operation of the bank, they gave us the assurance that the money is still there.

Azneal Ishak/Malaysiakini

Earlier today, Ismee said that the minutes of the Sept 13, 2011, SRC International board of directors meeting make reference to the first tranche of the RM2 billion loan from the Retirement Fund Inc (KWAP), with part of the funds sent overseas.

5.06pm: Court is adjourned for the day. The witness will return to the stand tomorrow morning.

Earlier reports:

May 28, Najib’s SRC Trial: Day 20

May 27, Najib’s SRC Trial: Day 19

May 15, Najib’s SRC Trial: Day 18

May 14, Najib’s SRC Trial: Day 17

May 9, Najib’s SRC Trial: Day 16

May 8, Najib’s SRC Trial: Day 15

May 7, Najib’s SRC Trial: Day 14

May 7, Najib Fails in Second Bid to Remove Sri Ram as 1MDB Lead Prosecutor

May 7, Najib Signed Guarantee Letter for RM2B KWAP Loan to SRC, KWAP Rules Breached

May 6, Najib’s SRC Trial: Day 13

May 2, Najib’s SRC Trial: Day 12

May 2, RM1M Golden Handshake in Final Month as PM for Najib

Apr 30, Najib’s SRC Trial: Day 11

Apr 29, Najib’s SRC Trial: Day 10

Apr 29, Court Throws Out Najib’s Application to Strike Out 7 SRC Charges, Trial to Go On

Apr 25, Najib’s SRC Trial: Day Nine

Apr 24, Najib’s SRC Trial: Day Eight

Apr 24, Najib’s SRC Trial: Day Seven

Apr 22, Najib’s SRC Trial: Day Six

Apr 18, Najib’s SRC Trial: Day Five

Apr 17, Najib’s SRC Trial: Day Four

Apr 16, Najib’s SRC Trial: Day Three

Apr 15, Najib’s SRC Trial: Day Two

Apr 3, Najib Trial: Day One