Najib Trial: SRC’s loan application could have been rejected

Najib Trial: SRC’s loan application could have been rejected

KUALA LUMPUR: Retirement Fund Inc (KWAP) vice-president (legal and secretarial affairs) Azlida Mazni Arshad testified two key points at the trial of former premier Datuk Seri Najib Razak who is facing seven charges related to 1MDB’s subsidiary, SRC International.

The first point was that the KWAP could have rejected SRC’s loan application.

She said that there are two levels of authorisation that need to be passed before a panel investment paper prepared by FID personnel is presented to the KWAP investment panel.

Azlida also agreed that the the head of department for fixed investment department (FID) and KWAP chief executive officer could choose not to sign the paper should they feel that something is not right.

Harvinderjit: In fact, if anybody force them to sign, will a police report be lodged?

Azlida: Yes.

Harvinderjit: Having signed the investment paper, FID members are bound to what they say?

Azlida: Their proposals? Yes.

Harvinderjit: (refers to an investment panel paper) Here we have 19/2011 investment panel paper. Prepared by FID?

Azlida: Yes.

Harvinderjit: Page 14. In preparation of this (paper), there’s two layers. The HOD (head of department) and CEO?

Azlida: Yes.

Harvinderjit: If any of three persons (HOD, CEO, and person preparing the paper) find anything lacking in the investment paper, they can choose not to sign?

Azlida: Yes.

Harvinderjit: It is their duty to act in the best interests of KWAP?

Azlida: Yes.

The witness, in her testimony, also agreed to a question that the panel investment paper prepared by FID was a recommendation to the investment panel, and that it was approved by the head of FID and KWAP CEO.

Harvinderjit: The panel was invited to deliberate and consider on the following. The FID did not recommend this?

Azlida: They recommended it.

Harvinderjit: When members of the FID have prepared and HOD reviewed (a paper), and signed off there, we take it as though they are representing to the CEO and investment panel, that whatever is being proposed and recommended here should be seriously considered by the investment panel?

Azlida: Yes.

The second point revealed by Azlida is the fact that Najib did not force KWAP investment panel to approve a loan application amounting to RM4 billion to SRC.

Harvinderjit: There are no minutes on the KWAP investment panel saying they approved the loan because it was instructed by the prime minister (Najib in 2011 and 2012)?

Azlida: Not in the minutes.

Harvinderjit: If it were true, it would have been in the minutes?

Azlida: Yes.

Harvinderjit: There were no minutes of the investment panel where it was noted that they (KWAP investment panel members) had no choice but to approve the loan to SRC International, (regardless of) whether it was for the first or second loan?

Azlida: Yes.

Harvinderjit: Otherwise, they would have breached their duty to KWAP?

Azlida: Yes.

KWAP investment panel not bound by external orders

Azlida testified that KWAP’s investment panel is not bound by the instruction of any person or body regarding matters under the purview of the retirement fund for public servants.

During cross-examination by accused Najib Abdul Razak’s lawyer Harvinderjit Singh, the 35th witness agreed with the question by the lawyer on the matter.

Harvinderjit referred to section 14 of the Retirement Fund Act 2007, which states that the panel can only decide on loans for investment-related matters which brings profits to the fund.

Harvinderjit: The investment panel cannot approve loans where terms are not remunerative to the fund?

Azlida: Yes.

Harvinderjit: Otherwise, they commit a criminal offence where they face a possible RM2 million fine or maximum 10 years’ jail. Every investment panel member is bound by this?

Azlida: Yes.

Azlida also confirms to Harvinderjit that the panel does not need to secure ministerial approval.

On Harvinderjit’s query whether the panel is bound by the instruction of the prime minister, deputy prime minister or any other minister, she said, “Ideally they are not bound.”

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