Update Najib’s trial Day 35: KWAP agreed to give SRC RM1 bln, Najib wanted it raised to RM2 bln

KUALA LUMPUR, July 10 (NNN-BERNAMA) — Former Malaysian prime minister Najib Razak had suggested that a RM1 billion loan which Retirement Fund Incorporated (KWAP) had agreed to extend to SRC International Sdn Bhd be increased to RM2 billion, the High Court here was told Wednesday.

Former secretary-general of the Finance Ministry Dr Wan Abdul Aziz Wan Abdullah, 67, said KWAP had initially agreed to provide a loan of RM1 billion to SRC but Najib subsequently informed him that the loan amount should be RM2 billion.

“At one meeting with Datuk Seri Najib at the Prime Minister’s Office regarding official work of the Finance Ministry, Datuk Seri Najib asked me to speed up the approval process for the SRC loan application with KWAP.

“He also told me that the SRC loan at RM2 billion will be sufficient, not RM1 billion,” said Wan Abdul Aziz, adding that only he and Najib were at the meeting but he could not remember the date.

He said this when reading out his witness statement on the 35th day of Najib’s trial on misappropriation of SRC funds amounting to RM42 million.

Earlier, the 45th prosecution witness said the loan amount of RM3.95 billion applied for by SRC in 2011 was huge and carried the risk of over-concentration.

As such, KWAP agreed to provide a loan of only RM1 billion, Wan Abdul Aziz said.

“After the valuation was done by the Fixed Income Department, KWAP only agreed to give a loan of RM1 billion, taking into consideration the risk of over-concentration because the amount of RM3.95 billion was very big and concentrated only on one company and one industry,” he said.

He said this matter was mentioned in the Investment Panel Paper tabled before the KWAP Investment Panel for a decision based on the valuation and application letter submitted by SRC dated June 3, 2011.

Wan Abdul Aziz said the Investment Panel Paper was to help the KWAP Investment Panel decide whether or not to approve the RM1 billion loan to SRC for the purpose of revolving capital and general investment.

“The Investment Panel meeting decided to postpone approval of the Investment Panel Paper until it has obtained further information from SRC,” he said.

He said that at the meeting, one of the panel members suggested that Najib be informed of KWAP’s decision proposing to extend a loan of only RM1 billion to SRC.

Wan Abdul Aziz said he and Azian Mohd Noh, the KWAP chief executive officer at the time, then met Najib to inform him of the KWAP Investment Panel’s decision before he again met Najib and was told that a loan sum of RM2 billion would be sufficient.

The witness said if there had been “no communication from Najib regarding the loan amount to SRC”, KWAP would have approved only RM1 billion.

Meanwhile, during cross-examination by counsel Farhan Read, the witness said the loan bid still needs to go through normal procedures despite the letter from the former prime minister.

To a question whether Wan Abdul Aziz perceived the letter from SRC International in 2011 to Najib, initially applying for the RM3.95 billion loan, as an instruction from Najib, the witness said “no matter how or when the request was made, we have to go through the normal process.”

The witness also pointed out that he was unaware that SRC had applied for the government’s grant.

Farhan: It would be not uncommon for fellow ministry or member of the government to discuss the issue of funding with you directly?

The witness replied “Yes.”

Farhan: Are you aware that the request (loan) which was made by SRC was not a company in operation? You are aware that it is a new company?

Wan Abdul Aziz replied “Yes.”

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