Testifying in SRC International’s US$1.18 billion (RM4.8 billion) civil suit against him, Najib, 71, said his role in the company was solely to ratify decisions made by its board of directors, which was expected to conduct the necessary due diligence.
“I lacked any position or power in the corporate governance structure to undertake any transactions by SRC, as these were solely within the ambit of the board.
“I was never informed of, nor was I able to independently verify, the disbursement of SRC funds.
“I particularly played no role in the events concerning the earmarking and eventual approval of the purported investment and the funds.
“By virtue of my position, I had no trust or fiduciary obligation over the proposed investment and the funds utilised for it. I also had no oversight or control of the disbursement of the funds,” said Najib.
As finance minister at the time, Najib was the sole shareholder of SRC International by way of the Ministry of Finance Inc.
He said it was “quite preposterous” to imply that his position as prime minister granted him the authority to hire and fire directors at SRC International, enabling him to exert control over the board.
“The power to hire or remove any director is usually in the hands of the shareholders of a company.
“From what I understand of corporate governance principles, this does not detract from the directors statutory and legal duties to act in the best interests of the company.
“The powers in SRC, as with 1Malaysia Development Bhd, being in the hands of the prime minister is something quite normal when dealing with GLCs.
“But this does not mean the GLCs blindly adhere to what is orally represented to them as being directions of the prime minister or finance minister or any other person,” he said.
SRC International filed the lawsuit in May 2021 after coming under new management, accusing Najib of breach of trust, abuse of power, personally benefitting from the company’s funds and misappropriating the same.
SRC International previously removed five of its directors, including Ismee Ismail, from the lawsuit, retaining Najib as the sole defendant.
However, the High Court permitted Najib to issue third-party notices against the former directors.
The company seeks a declaration holding Najib accountable for the company’s losses due to his alleged breach of duties and trust and for him to compensate the RM42 million loss it incurred.
The trial before Justice Ahmad Fairuz Zainol Abidin resumes tomorrow.