In an ongoing civil suit involving former Malaysian Prime Minister Datuk Seri Najib Razak, the former leader has doubled down on his claim that he had no direct involvement in the establishment of SRC International Sdn Bhd. The case, which is being heard in the Kuala Lumpur High Court, revolves around Najib’s role in securing a US$1.18 billion loan for SRC International, a former subsidiary of 1Malaysia Development Berhad (1MDB), and allegations of his abuse of power and mismanagement of funds.
Denial of Involvement in SRC International’s Formation
Najib, testifying as the first defendant in the case, repeatedly denied claims that he had played a key role in forming SRC International, asserting that the decision to create the company was not his. During cross-examination by SRC International’s legal team, led by lawyer P. Gananathan, Najib acknowledged that he was aware of the plans to establish SRC but insisted that the initiative came from 1MDB management.
"It was never my idea to set up SRC," Najib stated. "I only gave my final approval after recommendations were made." This statement aimed to distance Najib from the process, suggesting that his role was limited to green-lighting the project rather than driving it.
Despite this, Najib’s defense has come under scrutiny due to a draft letter sent to him by then 1MDB CEO Datuk Shahrol Azral Ibrahim Halmi in August 2010, outlining the proposal to establish SRC International. Najib's acknowledgment of receiving the letter but claiming no deeper involvement has raised questions about his actual influence in the matter.
Najib’s Role in Securing the RM2 Billion Loan
One of the most contentious issues in the trial is Najib’s involvement in the accelerated approval of a RM2 billion loan from the Retirement Fund Incorporated (KWAP) to SRC International. During the hearing, Najib was questioned about the urgency with which the loan was processed. He admitted to having spoken with KWAP’s chairman to expedite the funding, but justified his actions by stating that SRC needed the capital to pursue imminent investments.
"I wanted SRC to have sufficient capital to fulfill its objectives," Najib said. He emphasized that the urgency was driven by the need to secure investments, but distanced himself from the specifics of those investments. "I was informed that the investments were imminent, but it wasn’t my job to identify them," he added, asserting that the management was responsible for overseeing the details.
Gananathan pressed Najib on whether he had predetermined the amount of the loan, suggesting that Najib had played a direct role in shaping the financial request from the beginning. Najib denied this, stating that the loan amount was proposed by SRC International’s management, specifically former CEO Nik Faisal Ariff Kamil, and that he trusted their judgment.
The court heard that SRC initially requested RM3.95 billion, a figure that was later reduced to RM3 billion before being denied. The final request of RM2 billion was ultimately approved and expedited. Najib, while acknowledging his role in facilitating the loan, rejected the idea that he had acted as a de facto director of SRC International, a suggestion put forward by the plaintiff’s legal team.
SRC International’s Lawsuit Against Najib
SRC International, now under new management and wholly owned by the Ministry of Finance Incorporated (MoF Inc), filed a civil lawsuit in 2021 against Najib and several former directors, accusing them of misappropriating funds and breaching their fiduciary duties. The lawsuit originally named multiple individuals, including Datuk Suboh Md Yassin, Mohammed Azhar Osman Khairuddin, and Tan Sri Ismee Ismail, but the case has since been narrowed down to focus on Najib and Nik Faisal.
SRC International alleges that Najib abused his power to personally benefit from the company’s funds, mismanaging resources and contributing to its financial downfall. The company is seeking over US$1.18 billion in damages, claiming that Najib is liable for its losses. It is also demanding that he pay an additional US$120 million, a sum that allegedly entered his personal bank account, as well as compensation for other financial missteps related to SRC.
In response, Najib has named several former directors of SRC International as third-party respondents, suggesting that they, too, bear responsibility for the company’s financial failures. This legal maneuver indicates that Najib is seeking to shift some of the blame to other individuals involved in the company’s operations.
Imprisonment and Legal Battles
Najib has been serving a 12-year prison sentence and a RM210 million fine since August 2022 for his conviction over the misappropriation of RM42 million from SRC International. However, the Pardons Board recently reduced his sentence to six years and his fine to RM50 million. Despite his imprisonment, Najib remains embroiled in ongoing legal battles, with this civil suit being one of the most high-profile cases against him.
As part of the current proceedings, SRC International has called for a court declaration that Najib is responsible for the company’s financial losses due to his breach of trust and abuse of power. The plaintiff is seeking both general and exemplary damages, as well as additional interest and legal costs, from Najib and Nik Faisal.
The Road Ahead: Najib’s Defense and Public Repercussions
Throughout the trial, Najib has maintained his innocence, repeatedly asserting that his role in SRC International was limited to securing the necessary financing for the company and that he trusted the management to handle the investments. He has denied any suggestion that he acted improperly or directly benefited from the company’s funds.
Nonetheless, the case has drawn significant attention, both domestically and internationally, due to Najib’s high-profile political career and the broader context of the 1MDB scandal. SRC International, which was once a subsidiary of 1MDB, has become a symbol of the corruption and financial mismanagement that many believe plagued Najib’s administration.
As the trial continues before High Court Judge Datuk Ahmad Fairuz Zainol Abidin, all eyes remain on the outcome, which could have far-reaching implications for Najib and his legacy. If found guilty, Najib could face additional financial penalties and reputational damage, further complicating his already turbulent political career.
The trial will resume , with both sides expected to present further evidence as they battle over the key question: Was Najib merely a facilitator of funds for SRC International, or did he play a more central role in the company’s mismanagement and financial collapse? The stakes are high, and the nation is watching closely for the verdict.
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