Former Malaysian Prime Minister Datuk Seri Najib Razak faced the courtroom once again in a US$1.18 billion civil lawsuit filed by SRC International Sdn Bhd, a former subsidiary of the scandal-ridden 1Malaysia Development Berhad (1MDB). While admitting to having some "regrets" over the events that transpired during his tenure as Emeritus Adviser of the company, Najib firmly denied any personal knowledge or responsibility for the massive financial misappropriation that led to the downfall of SRC International and resulted in billions of losses.
Najib, who is currently serving a six-year prison sentence after his original 12-year conviction for the misappropriation of RM42 million from SRC was reduced by the Malaysian Pardons Board, testified in the Commercial High Court today, reiterating his stance of ignorance regarding the movement of SRC funds. These funds, including a staggering US$120 million, were traced back to his personal bank account.
However, Najib maintained that while certain aspects of SRC’s financial dealings may have unfolded poorly, he never authorized any transfers nor had knowledge of the funds being deposited into his account.
Regrets Without Responsibility
Under cross-examination from SRC’s co-counsel Kwan Will Sen, Najib was probed on whether he would assume any responsibility for the losses SRC suffered, which had significant repercussions on Malaysia’s economy and its people.
In response, Najib stated, "I have certain regrets, but at the time, I did not have knowledge or information about the flow of funds." The line of questioning highlighted his role in the events that led to the financial fallout, particularly the RM4 billion loan SRC International secured from the Retirement Fund Incorporated (KWAP). A portion of this loan was diverted through intermediaries, and evidence revealed that US$120 million eventually landed in Najib’s personal account. Despite this, the former prime minister categorically denied any authorization of these transfers.
When pressed further about taking responsibility, Najib’s response remained consistent: "It depends on whether I am accountable, but I have no knowledge of the funds that flowed and never authorized that flow into my account." He continued to assert his innocence, insisting that the financial missteps within SRC were outside of his control and understanding.
An Emerging Legal Battle
The ongoing civil suit against Najib, which began in May 2021, represents one of the many legal hurdles the former leader faces in connection with the financial mismanagement of 1MDB and its subsidiaries. SRC International, under new management since Najib's fall from power, is suing him for breach of duties and trust, seeking to recover US$1.18 billion in damages. This includes demands for general damages, exemplary damages, and compensation for the funds that ended up in Najib's account.
SRC International also accused Najib of abusing his position to personally benefit from the company’s funds. Najib held the role of Emeritus Adviser at SRC from 2012 until March 2019, during which time the company faced mounting losses. Additionally, SRC is seeking an order for Najib to repay the US$120 million he received from the loan that was initially intended for the development and investment arm of 1MDB.
The lawsuit initially included several other individuals, such as former SRC directors Datuk Suboh Md Yassin, Datuk Mohammed Azhar Osman Khairuddin, and Nik Faisal Ariff Kamil, among others. However, as the case progressed, the other defendants were gradually removed from the suit, leaving Najib as the sole defendant.
In turn, Najib has brought in former SRC executives as third-party respondents, claiming that their actions may have contributed to the company’s losses and that they should share the responsibility.
Power and Accountability
Throughout the trial, Najib's defense has consistently argued that the former prime minister was not directly involved in the day-to-day operations or financial decisions made by SRC International. Instead, his lawyers emphasized that Najib’s position as both prime minister and finance minister, combined with his advisory role at SRC, did not necessarily equate to having direct control over the company’s financial dealings.
Kwan, SRC's lawyer, challenged this notion during cross-examination, asserting that Najib’s immense power within the government and the company should have translated into a greater sense of responsibility. "As a person wielding great power, there is a higher expectation to act in accordance with the law," Kwan argued.
Despite this, Najib repeatedly stressed his lack of awareness regarding the specifics of SRC’s financial movements. When asked whether his position as finance minister and SRC’s Emeritus Adviser placed him in a position of accountability, Najib acknowledged his public role but maintained, "I had no knowledge of the fund flow at all."
The case also explored the role of former SRC CEO Nik Faisal Ariff Kamil, who Najib claimed was responsible for the company’s day-to-day operations. Najib denied that Nik Faisal had acted as his intermediary to the board of directors and rejected any suggestion that he had used his political influence to facilitate the transfer of funds.
As the trial continues, Najib remains steadfast in his claim of innocence, even as the evidence mounts against him. The lawsuit aims to recover losses incurred by SRC International due to the alleged mismanagement and financial impropriety under Najib’s leadership.
The High Court trial, presided over by Justice Ahmad Fairuz Zainol Abidin, is set to continue next week. If the court finds Najib liable for SRC’s losses, the financial implications for the former prime minister could be devastating, adding to the growing legal and financial troubles that have plagued him since the unraveling of the 1MDB scandal.
With billions of dollars at stake and the reputation of Malaysia's former leader hanging in the balance, the SRC case remains a pivotal moment in the broader saga of 1MDB. As new testimonies emerge and the trial unfolds, the Malaysian public will continue to watch closely, awaiting a verdict that may redefine Najib’s legacy in the country’s political and financial history.
The stakes are high, and while Najib may express "regret," whether the court will accept his disavowal of responsibility remains to be seen.
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