KUALA LUMPUR, Aug 30 — A former director of SRC International Sdn Bhd has recently filed to have two fellow former directors of the government-owned company indemnify or compensate him if he suffers any losses or is ordered to pay for any liability in a court case.

Datuk Mohammed Azhar Osman Khairuddin, who was a director of SRC International from July 2014 to February 2017, filed this application on August 27 in the High Court in Kuala Lumpur.

Azhar filed this application in relation to SRC’s lawsuit filed in May, where the company is claiming US$1.18 billion from the individuals it had sued, namely former prime minister Datuk Seri Najib Razak, former SRC director Datuk Suboh Md Yassin, SRC former CEO and now fugitive Nik Faisal Ariff Kamil, Azhar and former SRC director Datuk Che Abdullah @ Rashidi Che Omar.

The SRC had initially also included two former SRC International directors, Datuk Shahrol Azral Ibrahim Halmi and Tan Sri Ismee Ismail (also former SRC chairman) as part of this lawsuit, but dropped their names from the lawsuit on July 22.

This makes Shahrol Azral and Ismee now third parties to the lawsuit, as their names are no longer part of the lawsuit following the removal of their names as defendants.

In Azhar’s August 27 application filed through a third party notice naming both former directors, he gave notice to Shahrol Azral and Ismee that he is claiming indemnity from them.

Azhar gave notice that if he is found liable for any of the claims in SRC’s lawsuit, he is claiming for both Shahrol Azral and Ismee to fully indemnify him against all losses suffered and against all damages that he may be ordered to pay, or for the duo to jointly or severally contribute the portion that the court finds fit and proper for such losses or damages.

Azhar also gave notice that he is claiming for the duo to pay for the legal costs and all expenses and fees for the lawyers that would be incurred in his defence against SRC’s claim and for his application to claim indemnity from the duo, and that he is also claiming for further or other reliefs that the court deems fit and appropriate.

In his notice, Azhar told Shahrol Azral and Ismee that they must enter an appearance within 14 days of being served with the notice, if they wish to dispute SRC’s claim against Azhar or Azhar’s claim against them.

If they do not do so within 14 days of being served with the notice, Azhar said the two would be considered to have admitted to SRC’s claim against Azhar and to indemnify or contribute any portion as decided by the court, and would be bound by any court decision regarding the indemnity action.

In explaining why he had filed the court action to have Shahrol Azral and Ismee indemnify him, Azhar explained that he was not a director on SRC’s board or an SRC officer when the transactions that were said to have caused the company to lose US$1.18 billion took place from 2011 to 2013.

Azhar was a director in SRC International from July 29, 2014 until his resignation on February 22, 2017, and said he had no knowledge of these transactions totalling US$1.18 billion which took place before he joined SRC’s board.

Azhar instead argued that the events mentioned in the SRC’s lawsuit to recover US$1.18 billion had taken place when Shahrol Azral was SRC director from August 1, 2011 until his May 15, 2012 resignation and also when Ismee was SRC director from August 1, 2011 until his August 15, 2014 resignation.

The events listed in SRC’s lawsuit had included the disbursement of RM4 billion from Retirement Fund Inc (KWAP) to SRC’s AmIslamic Bank accounts in late August 2011 and late March 2012, as well as various transfers of SRC money including alleged transfer of US$120 million to Najib’s accounts between 2011 and 2012 and alleged transfer of US$82,000 to Nik Faisal’s account in January and February 2012.

Azhar said that he denies all of SRC’s claims in its lawsuit, including claims that he was a constructive trustee of the proceeds of the KWAP loans or that he had acted in breach of his trust of his duties as director over the use of the KWAP loans.

Azhar also denied SRC’s claim that he had allegedly dishonestly assisted Najib in the misapplication of the KWAP loans or that he had wrongfully converted SRC’s property, also denying SRC’s claim that he had conspired with any of the individuals sued by SRC.

Azhar said that he is therefore claiming for both Shahrol Azral and Ismee to indemnify or contribute the relevant portion of liability payable in the SRC lawsuit as if they had been sued by him, in the "unlikely event” that he is found liable for any of SRC’s claims.

Azhar also filed a separate notice on August 27 to inform Shahrol Azral and Ismee that he would want the court to decide on certain questions or issues in the SRC lawsuit that involve the duo, and that they would also have to file an appearance within 14 days of receiving the notice if they wish to be heard or dispute Azhar’s liability to SRC or to dispute their liability to Azhar.

The questions to be determined include whether Azhar was legally and factually a constructive trustee together with Shahrol and Azral of SRC’s KWAP loans or in relation to alleged fraudulent or unlawful dealing or use of SRC’s funds, and whether Azhar together with the duo had dishonestly assisted Najib or any others owing fiduciary duties to SRC when the transactions took place when Azhar was not a SRC director or officer then.

The other questions of law that Azhar wanted determined was whether he together with the two former directors had wrongfully converted SRC’s property through various alleged transactions, and whether he together with the duo had conspired with each other or others to cause damage to SRC.

This would mean that Azhar is seeking for the court to decide whether the duo had committed any of the alleged wrongdoings.

The SRC lawsuit is scheduled to come up next in the High Court on September 3.