Najib amended SRC constitution to gain control of the company, says ex-chairman

Former SRC International chairman Ismee Ismail.

KUALA LUMPUR: The High Court heard today that Najib Razak added a clause in the constitution of SRC International Sdn Bhd at an extraordinary general meeting (EGM) to make him the adviser emeritus of the company.

The amendment also indirectly gave him control of the company, which came under the Finance Ministry Incorporated, it was told.

Former SRC International chairman Ismee Ismail said this was made known in the shareholders’ minutes of April 23, 2012 which were signed by Najib.

However, the location of the EGM was not revealed.

“The minutes said Article 117 was added in the Memorandum and Articles of Association of SRC International.

“It said the prime minister (Najib) was made adviser emeritus of SRC International and that the board would give due consideration and implement any advice of the adviser emeritus in the best interest of the company,” he said when examined by deputy public prosecutor Ishak Mohd Yusoff.

Ismee said the shareholders’ minutes stating that a clause had been added during the EGM were revealed by SRC International CEO and managing director Nik Faisal Ariff Kamil at a company board meeting on June 8, 2012.

Questioned by Yusoff on the implications of Article 117, Ismee said Najib as the sole shareholder had control over SRC International.

“He could control the company through the CEO,” he added.

When cross-examined by lawyer Harvinderjit Singh, Ismee said he had not seen Najib signing the minutes or met him when the EGM was held.

Harvinderjit said the appointment of SRC directors did not need the prime minister’s approval, adding that the power to appoint directors of SRC lies with the company’s board.

Ismee agreed, but he insisted that the board’s decision to appoint directors was still subject to the prime minister’s approval.

Harvinderjit then said that it was not stated in SRC’s memorandum and articles of association that the appointment of directors requires the prime minister’s approval, and that the prime minister’s role was only to formalise the decision.

SRC International, a former subsidiary of 1MDB, was fully owned by the Finance Ministry Incorporated during Najib’s time as finance minister.

The prosecution is contending that the true power in directing and managing the affairs of 1MDB and SRC International lay not with the board of directors, as required by law, but with Najib.

The former prime minister was also chair of the 1MDB board of advisers.

Najib, 66, is facing three counts of criminal breach of trust, one charge of abusing his position and three counts of money laundering over SRC International funds amounting to RM42 million.

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 in Jalan Raja Chulan and the Prime Minister’s Office in Putrajaya between Aug 17, 2011, and Feb 10, 2015.

The hearing continues before judge Mohd Nazlan Mohd Ghazali.