If SRC board didn’t listen to Najib, they would be removed.
9am: Former prime minister Najib Razak enters the court and takes a seat in the front row of the public gallery to await the start of proceedings.
Also seen in court is his lead counsel Muhammad Shafee Abdullah and the defence team, as well as DPP V Sithambaram and others comprising the prosecution team.
9.20am: Former SRC International chairperson Ismee Ismail takes the stand, with Shafee leading the cross-examination.
The High Court hears from Ismee that former SRC CEO Nik Faisal Ariff Kamil was the grandson of former Kelantan Menteri Besar and Dewan Rakyat Speaker Nik Ahmad Kamil.
The mention of Nik Faisal’s lineage comes about when Shafee questions Ismee about the qualifications of those who sat on SRC’s board of directors.
While testifying that he does not know who appointed Nik Faisal as CEO and managing director of the company, Ismee agrees to Shafee’s suggestion that Nik Faisal came from a good background and possessed good qualifications.
Shafee: Do you know how Nik Faisal was appointed?
Ismee: To SRC? No idea.
Shafee: You didn’t try to find out?
Shafee: He was a young man. How old was he?
Ismee: If you ask me to guess…I never thought of asking (about) his age. I think he was 46.
Shafee: So he should be more than 46 now. How old are you?
Shafee: (Do you know) Nik Faisal’s family background and so on?
Ismee: Who was his late grandfather…if I’m not mistaken, his (Nik Faisal’s) grandfather was former speaker or Kelantan MB.
Shafee: So his late grandfather Nik Kamil was the first Malay speaker (of the Dewan Rakyat)?
Ismee: I think so. He came from a good family background.
Shafee: And Nik Kamil was also former MB of Kelantan?
Shafee: You would agree he came from a well-regarded family in Kelantan?
Shafee: And (in) Malaysia?
Ismee then concurs with a suggestion by Shafee that Nik Faisal was not just someone who was plucked out of nowhere to be SRC CEO and managing director, as he had good qualifications and came from a good background.
Shafee asks how familiar Ismee was with the former prime minister.
Ismee says not in a personal but professional capacity in relation to his work, especially in Tabung Haji and most recently as chairman of Media Prima. This entailed meeting him at least once a quarter.
Ismee usually meets him in the PMO or Parliament and at home once or twice in the Taman Langgak Duta house.
He has known Najib since 2009 but he knew him earlier while the latter was deputy prime minister.
9.22am: Clad in a red baju kurung, Najib’s wife Rosmah Mansor enters the courtroom.
She takes a seat at the front row of the public gallery, right behind the dock where her husband sits while proceedings are underway.
DPP V Sithambaram informs the court that as Rosmah’s statement had been recorded, it would be prudent for her not to be in court to avoid future problems.
“We do not wish for any problems later. We do not wish to be seen as being difficult. It is just a matter of procedure,” says Sithambaram.
Shafee then informs the court that he will leave it to Kuala Lumpur High Court judge Mohd Nazlan Mohd Ghazali to make a decision on the matter.
9.38am: Rosmah is seen standing up from the front row of the public gallery and leaving the court together with her lawyer K Kumaraendran.
9.46am: Ismee confirms that day-to-day work is handled by the management but the CEO is also a board member. Thus he is able to brief the board.
Shafee suggests that Nik Faisal’s honesty is imperative for the company to function, to which Ismee agrees. During his time as chairman, Ismee said he had no issue trusting Nik Faisal.
9.50am: Prosecution witness Ismee Ismail (below) tells the High Court that he would not have accepted the appointment to become SRC International Sdn Bhd’s board member if he had known about issues of dishonesty concerning the former 1MDB subsidiary’s CEO Nik Faisal Ariff Kamil then.
This testimony comes from Ismee after he agrees with defence lawyer Muhammad Shafee Abdullah that he has a different view of Nik Faisal today.
Shafee: Do you agree with me that the honesty of the CEO, in this case, Nik Faisal, is of the utmost importance for the board to function?
Shafee: He must be candid, (engage in) full disclosure, and be honest for the board to make decisions?
Shafee: You have no difficulty with the board. But trusting Nik Faisal..you had no issue trusting him at the time?
Shafee: It’s accurate to say that today you have a different view of Nik Faisal, after much exposure. We have shown you documents, proof?
Shafee: With the benefit of hindsight, if you had known then (what you know now), you would be more careful?
Ismee: I would not have accepted the appointment (to SRC International’s board of directors), even.
Ismee: Why should I?
Shafee: You must have a reason.
Ismee: Susah nak percaya (It would be hard to trust).
Shafee: The board can’t function (without the honesty of the CEO)?
10am: Nik Faisal might have been misled by SRC’s then finance director Terrence Geh about the submission of the company’s audited financial report for 2013, the High Court hears.
Ismee tells the court that this could also be the case why the board was misled into believing that the report had been submitted to the Companies Commission.
Shafee: Now Tan Sri, this is important, I hope you don’t get uncomfortable. The court will decide on Najib’s fate. (Defence lawyer) Harvinderjit Singh has taken you on in several instances. Do you believe – when Nik Faisal says this audited account, it was inadvertent, when he falsely reported to the board that the audited account had been submitted – would you believe him?
Ismee: What I can recall, what I believe then, is that he may have also been misrepresented by Terrence who prepared the account.
Shafee: Terrence, what is his full name?
Ismee: Terrence Geh.
10.10am: Ismee says when he handed his resignation letter from SRC’s board to Najib’s secretary, he didn’t complain about Nik Faisal but rather only complained about the company.
He does not know if the complaints were escalated to Najib.
10.29am: Shafee asks Ismee if the MACC officers were harsh with him when taking his statement. Ismee asks what does he mean by “harsh”?
Shafee then asks him if he’s blacklisted and had his passport taken away.
Ismee says he was blacklisted and his bank accounts frozen.
Ismee agrees with the defence that Article 117 of SRC International’s Memorandum and Articles of Association does not compel the company’s board to follow then-prime minister and advisor emeritus to the company Najib’s advice on how the company is managed.
During cross-examination by Shafee, Ismee agrees that this differs from Section 3 of the Petroleum Development Act 1974, whereby Petronas is subject to the control and direction of the prime minister.
Shafee: Referring to Article 117, whereby the prime minister was appointed as advisor emeritus, (with regard to) the prime minister’s advice, the board shall give consideration and implement any advice in the best interests of the company.
This is different from Section 3, which is a mandatory direction (from the prime minister on Petronas).
Article 117 is still (in line) with the Companies Act, (to act) in the best interests of the company.
Ismee also says that while he was SRC chairperson, he saw nothing wrong with following Najib’s advice, as represented by Nik Faisal, as it was perceived to be in the best interests of the company.
10.33am: Ismee says he had three investigations against him involving Tabung Haji.
One was over the use of Tabung Haji funds for political purposes where he was investigated for criminal breach of trust.
The second is a Tabung Haji sale of an oil palm estate in Indonesia in about 2012 or 2013. Ismee was accused of misrepresenting the board over the sale.
The third concerns the acquisition of an oil palm estate in Indonesia.
10.35am: Ismee is also being investigated for 1MDB other than SRC.
Ismee says his accounts were frozen by the MACC.
Ismee denies receiving any money from Najib after Shafee asks him.
Shafee: Why did they freeze your accounts?
Ismee: I don’t know.
Shafee: Did Najib give you money?
10.39am: FGV Bhd is also suing Ismee. He was once a director there. He refuses to talk about the case as it is ongoing.
10.41am: Shafee asks Ismee if he was asked to implicate the ultimate shareholder in SRC while giving his testimony to MACC.
“It is my knowledge that they had asked you to implicate the ultimate shareholder, which is Najib when they took your statement,” Shafee asked.
“No, I don’t think so,” Ismee said.
10.44am: Shafee asks if MACC told Ismee indirectly he had committed some offence.
Ismee: I don’t think so. Throughout the course of the investigations, I was questioning myself.
10.46am: Shafee ends the cross-examination. Court takes a short break.
11.02am: Court adjourns with Ismee taking the stand again. Ad hoc prosecutor Sithambaram examines him now.
11.08am: Ismee says the board can’t make decisions without the prime minister’s advice.
11.11am: Ismee says Najib held the post of chairman in the board of advisers in 1MDB while Jho Low held no position.
Sithambaram asks if Najib is an associate of Jho Low’s. Ismee says he didn’t know.
11.10am: Those present at the trial are in stitches when Sithambaram repeatedly refers to 1MDB-linked businessperson Low Taek Jho as “J Lo” instead of “Jho Low”.
This prompts Shafee to tell Sithambaram that he is supposed to be referring to Jho Low.
J Lo is most commonly known as a nickname for American singer Jennifer Lopez.
However, it appears that Sithambaram initially does not realise his mistake as he goes on to defend his reference to Low while re-examining Ismee.
Sithambaram: My learned friend (defence counsel) Harvinderjit (Singh) yesterday asked you some questions, and I want to ask you again just to clarify. He asked you whether Jerome Lee, Terrence Geh and Nik Faisal were close associates of J Lo. And you say now you know that they are (close associates)?
Ismee: Yes, yes.
Sithambaram: What was the designation of Datuk Seri Najib Abdul Razak in 1MDB?
Ismee: (He was the) chairperson of 1MDB’s board of advisers.
Sithambaram: What was the post (or) position of J Lo in 1MDB’s board of director?
Ismee: No position in 1MDB.
Sithambaram: I want to ask the same question as Harvinderjit. From what you know, is Najib a close associate of J Lo?
Ismee: I wouldn’t know.
This prompts Shafee to correct Sithambaram.
Shafee: It’s Jho Low.
Sithambaram: Yes, J Lo.
The DPP’s reply then causes many in the courtroom to burst into laughter before Ismee also chips in.
Ismee: You asked (me) about J Lo or Jho Low?
11.45am: Sithambaram grills Ismee over SRC’s auditing.
12.12pm: Sithambaram asks if Ismee says he acted on the instructions of the prime minister, then how come they didn’t follow them exactly.
Ismee says they tweaked his instructions a bit.
Sithambaram asks if the board ever defied the prime minister’s orders. Ismee disagrees, adding that they never disobeyed his orders.
12.15pm: Members of SRC’s board of directors only had two options if they refused to abide by minutes containing advice from Najib – resign, or be removed.
This is revealed by Ismee during re-examination by DPP Ishak Mohd Yusoff.
Ishak: What would have happened if the board did not abide by the minutes?
Ismee: It is hypothetical now. Either (the members of the board of directors would have to) step down or we would be removed.
In earlier testimony, the court heard that Najib was the advisor emeritus of SRC.
In accordance with Article 117 of the company’s Memorandum and Articles of Association, Najib’s advice on material and strategic matters regarding the company had to be seriously considered and implemented by the board.
After seven days of questioning from the prosecution and defence, 39th witness Ismee is let go from the witness stand.
12.18pm: The DPP tells judge Nazlan that the next witness, Mazidah Abdul Majid, will be reading minutes from cabinet meetings.
As such, the original minutes from cabinet meetings will be brought later this afternoon.
12.19pm: The former cabinet deputy secretary-general says that she had been questioned by MACC on a few occasions.
Her witness statement has been amended a lot.
12.24pm: Her job is to ensure all procedures and protocols are met during cabinet meetings.
12.32pm: Mazidah reads out excerpts of the minutes of a cabinet meeting that took place in 2011. She lists all the ministers who attended the meeting.
She testifies that the cabinet passed a resolution to provide a government guarantee for SRC to secure an RM2 billion loan without any discussion by ministers in attendance.
Furthermore, she states the minutes of the cabinet meeting did not show that any discussion had taken place regarding the matter.
The cabinet meeting was held on Aug 17, 2011, and was chaired by Najib.
According to Mazidah, a memorandum had been received from the Finance Ministry.
The memorandum was meant for the cabinet to discuss a guarantee for SRC to acquire an RM2 billion loan from market sources or domestic financial institutions, in order to finance its activities in the natural resources sector.
Apart from this, the memorandum was meant to secure tax exemptions for SRC, and for Najib to be given the power to determine the terms and conditions of the loan.
“There was no discussion by the cabinet (regarding the memorandum) because if there were any, it would appear in the meeting’s minutes.
“Such a note does not exist in these minutes,” she says.
12.53pm: She says another cabinet meeting on February 8, 2012, had taken place.
12.57pm: The memorandum concerns the government guaranteeing the interest and principal of the RM2 billion loan obtained by SRC, with a 10-year tenure.
1pm: Proceedings break for lunch, and are expected to resume at 2.30pm this afternoon.
2.40pm: Proceedings resume with the examination-in-chief of Mazidah Abdul Majid.
2.45pm: Mazidah testifies that the cabinet passed a resolution to provide a government guarantee for the second tranche of an RM2 billion loan from KWAP to SRC without any discussion by ministers present.
During examination-in-chief by DPP Muhammad Izzat Fauzan, the 40th witness says that the resolution was approved without discussion during the Feb 8, 2012 cabinet meeting chaired by Najib.
“There was no discussion during the cabinet meeting (which took place on Feb 8, 2012).
“If there had been a discussion, the minutes would mention it,” Mazidah testifies.
SRC International was granted a loan totalling RM4 billion from KWAP.
Mazidah testifies that among ministers present at the cabinet meeting were then deputy prime minister Muhyiddin Yassin; then home minister Hishammuddin Hussein; then information, communications and culture minister Rais Yatim; then minister in prime minister’s department Nor Mohamed Yakcop; then rural and regional development minister Mohd Shafie Apdal; and then international trade and industry minister Mustapa Mohamed.
Other ministers present were then defence minister Ahmad Zahid Hamidi, then health minister Liow Tiong Lai and then human resources minister S Subramaniam.
2.50pm: Mazidah says the memorandum sought to get a tax exemption on the loans for SRC was in line with the Section 10, of the Loans Guarantee act 1965.
It also gives the prime minister power to determine the terms and conditions of the loan sought by SRC.
She says there had been no debate about this memorandum among the ministers at the said meeting.
2.55pm: According to the minutes of the meeting, Mazidah says, Najib did not state his vested interest in SRC. She adds that none of the ministers requested for Najib to leave the meeting when the memorandums were brought up.
3.10pm: She says there was another cabinet meeting on May 16, 2012. Najib did not attend as he was on a work trip to New York.
Muhyiddin Yassin chaired the meeting. The cabinet was going to debate a memorandum ‘Amendments to the purpose of loans for loans acquired by SRC International and 1MDB Real Estate Sdn Bhd’.
The memorandum was to amend the purpose of SRC’s loan – “to fund investment activity in natural resources and working capital”.
The other term in the memorandum was an amendment be made to the purpose of 1MDB Real Estate Sdn Bhd to secure a loan from the government.
The original purpose of the loan was changed to: “to fund the cost of installation placement of military equipment in the Sungai Besi air base, which was involved in the Bandar Malaysia project, and other investments in property development”.
The other term was that the prime minister would have the power to amend the terms and conditions of the loans.
3.20pm: Mazidah says another cabinet meeting was held on November 6, 2015, that was chaired by Najib.
Then Najib in his position as finance minister tabled a memorandum seeking an RM100 million short-term loan from the government for a period of one month to pay off interests and late payment penalties known as “bai al-‘inah” to KWAP for the RM4 billion loan that SRC had received.
The cabinet had agreed to the short-term loan without objection.
3.25pm: On November 15, 2015, another cabinet meeting was held and chaired by Ahmad Zahid Hamidi.
She says this meeting was called to seek the cabinet’s approval of the minutes taken during the meeting on November 6, 2015.
3.32pm: Mazidah says the cabinet minutes had to be declassified for this case today.
She adds it is normal practice for cabinet members to leave the meeting if they have vested interest in any of the memorandums.
3.37pm: Mazidah says in the past Khairy Jamaluddin as youth and sports minister, Hishammuddin Hussein as defence minister and Najib himself have left meetings when they had vested interest in the memorandums the cabinet was discussing.
Najib left a cabinet meeting on one occasion because the memorandum they were discussing involved CIMB Bank.
3.42pm: Mazidah is asked to identify the former chief secretary to the government Ali Hamsa. He came out from the holding room and she promptly identifies him. She also identifies Najib.
3.44pm: Cross-examination of the witness begins, led by Shafee.
Mazidah says the declaration of vested interest is in the code of ethics of the ministers.
She says this code was in 1997 and 1998 that was amended in 2013, and she doesn’t have a copy of it the code of ethics with her.
Shafee asks her to bring it if she can as this is the cornerstone of the defence’s cross-examination.
3.47pm: Shafee asks her the reason Khairy left the meeting. She says she does not remember but if memory serves, he left because one of his family members was involved in the memorandum being tabled.
3.48pm: She asks if this will be a breach of the Official Secrets Act.
“If I am allowed to reveal this, I will.”
Sithambaram says it is for the cabinet to decide.
Judge Nazlan said her statement is hanging.
Shafee says the court can guess why Najib left the meeting when the cabinet was discussing CIMB Bank as Najib’s brother was the bank’s chairman at the time.
3.51pm: Shafee asks her to detail why the three ministers left cabinet meetings on three different occasions as it is important to his cross-examination.
3.53pm: Shafee asks her who advises a minister that they should leave a cabinet meeting if they have vested interest in the discussion.
She says a minister would leave on his own volition.
“In all my years in cabinet, the ministers will leave by themselves. Sometimes, other ministers would point it out in the meeting that a particular minister had vested interest or the secretariat would inform the minister.”
4pm: Mazidah says the chief secretary attended all cabinet meetings.
Shafee asks if the chief secretary has the power to advise a minister if there is a conflict of interest.
She says he can advise the minister if the chief secretary is aware of it.
4.04pm: She says the secretariat did not know that Najib was advisor emeritus to SRC.
Shafee: Now that you know he is an advisor to SRC by virtue of being the prime minister. Would you know if that is an interest?
Sithambaram interjects and says the question is unfair. Nazlan says Shafee’s questioning is ok but they can clarify later.
Mazidah: In my line of duty, if there is a conflict of interest, I will refer it to the Attorney-General’s Chambers. But I didn’t know so I didn’t refer it to them.
4.07pm: Mazidah says she was not aware of Najib’s vested interest about the KWAP RM4 billion loan to SRC and the RM100 million short-term loan approved by the cabinet.
4.08pm: Shafee says he needs the code of ethics before he can continue his cross-examination. The prosecution and defence have agreed to try and get it tomorrow morning.
4.20pm: Shafee asks that the cross-examination be continued tomorrow until the code of ethics is at hand.
Sithambaram then asks for the court to be adjourned.
Nazlan agrees and adjourns the court to tomorrow morning.
Jun 17, Najib’s SRC Trial: Day 26
Jun 14, Najib’s SRC Trial: Day 25
Jun 13, Najib’s SRC Trial: Day 24
Jun 12, Najib’s SRC Trial: Day 23
Jun 11, Najib’s SRC Trial: Day 22
Jun 10, Najib’s SRC Trial: Day 21
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 6, Najib’s SRC Trial: Day 13
May 2, Najib’s SRC Trial: Day 12
Apr 30, Najib’s SRC Trial: Day 11
Apr 29, Najib’s SRC Trial: Day 10
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