KUALA LUMPUR (Oct 18): Imprisoned former prime minister Datuk Seri Najib Razak said in the Kuala Lumpur High Court on Friday that he had some regrets regarding the SRC International Sdn Bhd's (SRC) debacle, where billions of Retirement Fund Inc (KWAP) funds meant to seek alternative power source, ended up being misappropriated and squandered. 

The 71-year-old, however, was quick to add that at around 2010 to 2012, he, who was then also the finance minister, did not have knowledge or information regarding matters that transpired in the company that was once a 1Malaysia Development Bhd (1MDB) unit but came under Ministry of Finance Incorporated's (MoF Inc) umbrella in 2012.

SRC lawyer Kwan Will Sen: Hindsight is 20/20. With your criminal conviction, with all the matters that transpired in SRC, leading to the plaintiffs losses. My question is simple, do you have any regrets? 

Najib: I have certain regrets; but based on that particular time, I have no knowledge or information.

The ex-PM is currently testifying in his defence in the on-going civil suit brought by SRC against him, concerning a RM4 billion loan from KWAP, which was given to SRC in two tranches in the second half of 2011 and the first half of 2012. The company claims that US$120 million had eventually ended up in Najib’s bank account.

This is different from Najib's SRC criminal case where he is already serving prison sentence after the apex court dismissed his appeal and review bid. In February, the Pardon's Board reduced his initial 12-year jail sentence and fine of RM210 million to six years and a RM50 million fine.

During proceedings on Friday, Najib also denied that he had failed the company, resulting in overall losses worth US$1.18 billion, as per SRC-BVI liquidator Angela Barkhouse's testimony in this trial. 

Kwan: I also suggest, for a person with great power, you would agree that there is greater accountability and responsibility on your part to act in accordance with the law and to not use or benefit personally.

Najib: I maintain I have no knowledge of the fund flows at all, but I agree with the statement. As minister of finance, I was in a position of accountability. 

Kwan: You have failed SRC and cost it losses approximately US$1.18 billion, based on the evidence of Angela Barkhouse. 

Najib: I disagree.

Earlier, Kwan had walked through the money trail showing how part of the KWAP loans had made their way through the SRC British Virgin Island's (SRC-BVI) account, to fiduciary fund Enterprise Emerging Markets Funds (EEMF) then to Blackstone Asia Real Estate Partners, an outfit linked to fugitive financier Low Taek Jho. US$120 million then finally ended up in Najib's personal Ambank account. 

Najib denied that the funds in his account were from KWAP. 

He also repeated that he had a political responsibility regarding SRC matters, but it was still questionable whether he had legal responsibility. Last month, Najib had testified that to him, he had no fiduciary duty over the utilisation of the company's funds. 

In this suit, SRC is seeking a declaration from the court that Najib is liable to account for the company's losses of US$1.18 billion due to breach of duties and trust. It is also asking for an order for Najib to compensate US$120 million and for former SRC chief executive officer Nik Faisal Ariff Kamil to pay US$2 million to SRC, and for the company to be entitled to trace the amount in general, exemplary, and aggravated damages.

The company has obtained a judgement in default against Nik Faisal in November 2021, after he failed to enter an appearance in the matter.

The trial before High Court judge Datuk Ahmad Fairuz Zainol Abidin continues on Oct 21.  

https://www.theedgemarkets.com/node/730680