KUALA LUMPUR: The pensioners’ retirement fund (KWAP) imposed a higher interest rate to discourage SRC International Sdn Bhd from obtaining a second RM2 billion loan, a witness told the High Court in the abuse of power and graft trial of Najib Razak.
“We were hoping to push them (SRC) out,” former KWAP vice-president Amirul Imran Ahmat said under cross-examination by Najib’s counsel, Harvinderjit Singh.
The 29th witness said KWAP suggested a 4.6% interest rate per annum, which was higher than those imposed by Khazanah and the Malaysian Government Securities.
However, he said the KWAP investment panel approved the loan to SRC as it was guaranteed by the Malaysian government.
“That (the government guarantee ) was the selling point why the loan was finally approved (in 2012),” he said.
The former prime minister is facing six charges of money laundering and criminal breach of trust in the transfer of RM42 million to his account from SRC International, a former unit of 1MDB.
He is also accused of abusing his power as prime minister by giving government guarantees on SRC International’s RM4 billion loan from Retirement Fund Inc.
The Pekan MP was charged with committing the offences at AmIslamic Bank Bhd on Jalan Raja Chulan and the Prime Minister’s Office in Putrajaya between Aug 17, 2011 and Feb 10, 2015.
Amirul was entrusted to prepare proposal papers before KWAP approved a total of RM4 billion to SRC in 2011 and 2012.
The witness said former SRC director Nik Faisal Ariff Kamil and ex-1MDB chief financial officer Terence Geh were mostly involved in providing their business plans to KWAP before the RM2 billion was given.
He said they forwarded documents on SRC’s proposed investments overseas in Aabar(a company in Saudi Arabia), Indonesia and Mongolia but they did not look impressive.
“I did not see an air of confidence in the proposed investments. They did not give direct answers to queries and the documents were superficial,” he said.
On March 27, 2012, the loan facility agreement was sealed with the then SRC director Suboh Md Yassin and KWAP former CEO Azian Mohd Noh signing on the dotted line.
Najib, who was also the finance minister, signed the guarantee letter on behalf of the government.
Hearing before trial judge Mohd Nazlan Mohd Ghazali continues.