“SRC directors were not given free reign”

KUALA LUMPUR – The High Court heard that the board of directors of SRC International Sdn Bhd had been appointed to carry out the wishes of Datuk Seri Najib Rasak, shareholder of the company.

SRC International’s former director Tan Sri Ismee Ismail, 59, testified that it is typical for a newly established company’s board of directors (BOD) to be given a “blank slate” for them to run their operations, which would allow them to use their expertise and opinions to decide the company’s direction and determine which government-to-government endeavours to pursue.

According to the witness, however, SRC International BOD was different.

The point I am trying to make here is that when we were appointed as board members of this newly incorporated company called SRC, it was not a blank piece of paper with the words ‘Board Members, tell us what you want to do.’

Ismee, who spoke yesterday, said that “in SRC, after you have been appointed as a member of the board, you will be told these are the wishes or directions from the shareholders for the management to implement with the support of the BOD.”

Najib was SRC International’s sole shareholder as Minister of Finance, Inc., when he was both the Prime Minister and Finance minister.

Muhammad Farhan Muhammad Shafee, Najib’s lawyer, cross-examined Ismee. The company had sued Najib, and former SRC CEO Nik Faisal Ariff Kamil, for US$1.18bil.

Ismee, in response to another question, recalled an instance where he was upset with Nik Faisal who is still at large when he found out that the company had not filed and submitted SRC International’s financial accounts for the 2013 year ended March 31 at the Companies Commission of Malaysia. This was due by September 2012.

According to Ismee a news item was published on The Edge dated May 5, 2014. It was titled “SRC has yet to file their accounts or request an extension”.

“When I learned of the article, Nik Faisal was told to write a nasty reply to The Edge in order to refute its article.

Nik Faisal, however, told me that SRC still had not filed the account. “I shouted and I tried to close the account at this point,” he said.

He added that Nik Faisal had falsely claimed “everything is good”.

Ismee said, “We did not expect Nik Faisal would be a cheat.”

SRC, under a new management in May 2021 filed the lawsuit alleging Najib committed breach of trust and abuse of power. They also claimed that Najib misappropriated funds from the company, as well as gaining personal benefits.

It named Najib along with its former directors Datuk Suboh Md Yassin, Datuk Mohammed Azhar Osman Khairuddin, Datuk Che Abdullah @ Rashidi Che Omar, Datuk Shahrol Azral Ibrahim Halmi, Nik Faisal and Ismee.

The suit was later amended to remove six defendants, including Ismee. Najib and Nik Faisal were retained as the first two defendants.

Najib also brought in the former SRC International directors to be third-party respondents.

The company wants damages, interest, costs, and a court order declaring that Najib was responsible for its losses because of his breach of duty and trust. It also demands that Najib reimburse the US$1.18bil that the company has suffered.

The company is also suing Najib for US$120 million and Nik Faisal for US$2 million, respectively, due to fraudulent breach of fiduciary duty and breach of trust.

The hearings before Justice Ahmad Fairuz Zainol Abidin continue on June 10.

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