KUALA LUMPUR, March 25 — A former director for SRC International Sdn Bhd today denied he had breached his statutory and fiduciary duties for the losses it suffered as alleged by Datuk Seri Najib Razak.

Datuk Mohammed Azhar Osman Khairuddin was testifying as a third party in SRC International Sdn Bhd’s US$1.18 billion (RM5.58 billion) civil suit against Najib.

In his witness statement, Mohammed Azhar said he cannot be held responsible for company matters that happened before his stint where a total of US$1.18 billion were transferred out of SRC International into various intermediaries between December 2011 and April 2014.

In his testimony, Mohammed Azhar said he was appointed director in July 2014. He resigned in February 2017.

“I categorically deny this. As far as I can tell from my time there as a director, whenever it came to finances Nik Faisal would always begin by briefing the board of directors on the finances of SRC.

Nik Faisal Ariff Kamil was the former chief executive of SRC International.

“When I came in, I took over from Nik Faisal as chief executive in respect of the Sabah Gas Pipeline Project and the Peninsular Pipeline Project but Nik Faisal remained as an executive director of SRC in charge of handling all the finances, specifically, the KWAP loans.

“My specific task when joining SRC was to execute and get going the Sabah Gas Pipeline Project and the Peninsular Pipeline Project, which were two out of the three identified oil and gas projects in my role as chief executive,” his witness statement read.

As to the origin of the US$1.18 billion, these funds originated from a loan of RM4 billion which SRC International obtained from the Retirement Fund Incorporated (KWAP) — a statutory body which manages the pension scheme for Malaysia’s civil servants.

On Najib’s allegation that all losses claimed by SRC International as a result of the transactions making up the proposed investment fund and the purported fund investment were the result of various acts and omissions of the former directors, Mohammed Azhar disagreed.

He said he and other board members would direct Nik Faisal and the management to come up with a plan to retrieve the monies back since they were disbursed out of the company before his tenure as director.

“I categorically deny that any act or omission by myself had caused the losses.

“I had urged Nik Faisal to try to retrieve monies that SRC had disbursed abroad following my discovery of the severity of the losses suffered by SRC,” he said.

Mohammed Azhar also said despite his position as chief executive, he was neither a signatory nor ever in a position to give instructions to the accounts deposited overseas during his tenure in the company.

“As chief executive, my role was to set up a team to plan out and get all the necessary approvals to get the Sabah Gas Pipeline Project and the Peninsular Pipeline Project up and running.

“I also had to engage and work with consultants in order to make presentations to the various ministries,” he said.

Azhar also told the court he became aware of the status of the KWAP loan from the company’s other directors but asserted he has no personal knowledge about how the loans were obtained, as well as the processes to draw on the loans and how the funds were disbursed from SRC.

“Before I joined, I asked the other directors of SRC about the status of the funds from the KWAP loans and they informed me they went to Switzerland to check the funds themselves and they reported all was indeed there,” he added.

According to previous testimonies, the company’s mandated signatories were Nik Faisal and former director Datuk Suboh Md Yassin.

He conceded that the only time he was ever in charge of anything related to the company’s finances or loans was when he had to report to Bank Negara Malaysia, the Finance Ministry and the Malaysian Anti-Corruption Commission on behalf of SRC International.

“They wanted to know the exact status of the two loans secured from KWAP, whether there were updates on the same since the last report which might have been given to them by Nik Faisal and what efforts were expended to retrieve the monies back,” he said.

The hearing before Commercial High Court judge Datuk Ahmad Fairuz Zainol Abidin resumes tomorrow.

Imprisoned since August 23, 2022, Najib is serving his 12-year jail sentence and RM210 million fine for his conviction over the misappropriation of SRC International’s RM42 million funds, which has recently been reduced to six years of jail and RM50 million fine by the Pardons Board.

SRC, under its new management, had filed legal action against Najib and its former directors Suboh, Mohammed Azhar, Nik Faisal Ariff Kamil, Datuk Che Abdullah @ Rashidi Che Omar, Datuk Shahrol Azral Ibrahim Halmi and Tan Sri Ismee Ismail in May 2021.

However, later, it removed six names from the suit and retained Najib as the defendant.

Additionally, Najib has brought the former named SRC International directors as third-party respondents.

SRC as a plaintiff in the writ of summons had alleged that Najib had abused his power and obtained personal benefits from SRC International’s funds as well as misappropriated the funds. Najib was SRC’s Emeritus Advisor from May 1, 2012, until March 4, 2019.

SRC International, which is now wholly owned by the Ministry of Finance Incorporated (MoF Inc), is seeking general damages, exemplary, additional interest, costs and other appropriate relief provided by the court.

SRC International is currently seeking a declaration from the court that Naijib is liable to account for the company’s losses due to his breach of duties and trust.

The company is also seeking an order that Najib pay the US$1.18 billion in losses it suffered, and damages for breach of duties and trust; including an order that Najib compensate the sum of US$120 million which entered his bank account as well.

https://www.malaymail.com/news/malaysia/2024/03/25/in-src-internationals-us118b-civil-suit-against-najib-ex-director-says-not-responsible-for-monies-moved-before-his-stint/125415