PUTRAJAYA: The business plan of SRC International Sdn Bhd was a sham although Retirement Fund Inc (KWAP) had given a RM4 billion loan to the company with a government guarantee, the Court of Appeal heard today.
The court, which is hearing former prime minister Najib Razak’s appeal against his conviction and sentence in the SRC International corruption case, said this transfer of funds took place after KWAP had disbursed the loan in 2011 and 2012.
Ad hoc prosecutor V Sithambaram said SRC only “commenced business” by transferring out the bulk of the money to a Switzerland bank to be placed in a fixed deposit.
“Even the appellant (Najib) admitted this during cross-examination in the trial,” Sithambaram said when submitting before a three-member bench chaired by Abdul Karim Abdul Jalil.
He said Najib had, however, denied it was a sham and blamed the SRC board for what had happened.
Karim interjected to ask whether the intention of setting up SRC was a form of camouflage as the company had originally proposed investing in the energy sector in Indonesia and in Islamic bonds.
“Your Lordship is right. On paper, SRC put up proposals but there was nothing to show. Nothing at all,” the prosecutor said.
He said nobody in SRC was interested after the money had left the country.
SRC was set up to carry out and invest in projects associated with conventional and renewable energy resources, natural resources and minerals.
Sithambaram said he would have been happy if SRC had done well.
“I would have been proud as we will not have any power failure in Malaysia and we can obtain renewable energy at a cheaper rate,” he said.
The lawyer said that around 2015, SRC was unable to pay interest on its loan to KWAP.
As the government had guaranteed the loan, he said, the finance ministry decided to approve a short-term loan to settle the interest.
He said a RM100 million loan was first approved by the Cabinet in 2015, and a second loan of RM250 million was disbursed in 2016, with the nod for another RM300 million after that.
Najib, who is the Pekan MP, was convicted for abusing his power as the prime minister by giving government guarantees on SRC International’s RM4 billion loan from KWAP.
He was also found guilty on three counts of criminal breach of trust and three money laundering charges in relation to RM42 million belonging to SRC International, a former unit of 1MDB.
In July last year, High Court judge Mohd Nazlan Mohd Ghazali sentenced him to 12 years’ jail and fined him RM210 million after finding him guilty of the seven charges.
The hearing continues.-FMT