KUALA LUMPUR, April 30 — A RM2.5 million cheque issued from Datuk Seri Najib Razak’s account purportedly for an unspecified defence contract in 2015 was used as reimbursement for Barisan Nasional’s political activities and intelligence gathering, the High Court heard today.

HKS Consultant owner Habibul Rahman Kadir Shah, a known Najib associate, testified that the RM2.5 million cheque he personally received from the former prime minister had been used to conduct political operations, particularly for intelligence gathering for the Barisan Nasional coalition.

"I used this money to collect intelligence and establish ‘goodwill’ among the political parties.

"It was used for BN’s political benefit,” he told deputy public prosecutor Muhammad Saifuddin Hashim Musaimi when examined.

Habibul Rahman is the 23rd prosecution witness in Najib’s money-laundering and criminal breach of trust trial over RM42 million of funds from SRC International Sdn Bhd, a former 1Malaysia Development Berhad (1MDB) unit.

Habibul Rahman also confirmed he received the cheque from Najib at the latter’s official residence in Putrajaya in 2015.

He testified that the amount (RM2.5 million) was suggested to Najib and was for reimbursement of political operations that had been conducted.

Previously, the 18th prosecution witness, lawyer Ashraf Abdul Razak who had been a partner at the Zulqarnain & Co law firm from 1996 to 2017, said Habibul Rahman gave him the RM2.5 million cheque dated February 2, 2015, as the latter was one of the firm’s client.

When asked by deputy public prosecutor Muhammad Saifuddin Hashim Musaimi on why the cheque was addressed to the law firm, Habibul Rahman explained that he did so to avoid paying tax.

"I purposely requested for the cheque to be put under the firm’s name because the money would be deemed as personal income and revenue,” he said.

He confirmed instructing Ashraf to issue cheques to among others, his wife and his kids from the RM2.5 million received while the remainder were left in the firm’s account for covert political operations.

When cross-examined by Najib’s lead defence lawyer, Tan Sri Muhammad Shafee Abdullah, Habibul Rahman contradicted Ashraf and said he was never paid for any defence work.

"Definitely incorrect. I am not involved in any form of defence contract because then I would have to declare as my income,” he said.

When Shafee asked if Ashraf may have been confused by the term of "political defence”, Habibul Rahman said it was possible.

Habibul Rahman was then asked to briefly explain ‘political defence’ to court, to which he complied.

"In politics, you must have inter-level of knowledge so you can expect what will happen but to do that you need intelligence.

"So you must have a network of people to provide you information from time to time and you must know people do not give information for free,” he adding that one must also provide ‘goodwill’ to political parties’ divisions and branches to execute subterfuge strategies.

Asked whether he questioned Najib on the source of the RM2.5 million, Habibul said he did not do so since he believed it was sourced from political donation.

He said it was common knowledge that everyone wanted to give political donations to a prime minister in order to establish goodwill with one of the country’s most powerful leaders.

"I entered Umno in 1984 and this has been the way how Umno operates and all party presidents hold the party’s funds,” he said.

Habibul Rahman is among the direct beneficiaries out of 15 recipients of cheques totalling over RM10.77 million issued under two AmIslamic Bank accounts registered under Najib’s name, based on court documents produced in court previously.