KUALA LUMPUR, March 26 — A former director of SRC International Sdn Bhd told the High Court today he and other company directors were "obliged under the law and by practice to comply and implement” former prime minister Najib Razak’s decisions and instructions for the company.

Datuk Shahrol Azral Ibrahim Halmi was testifying as a third party in SRC International Sdn Bhd’s US$1.18 billion (RM5.58 billion) civil suit against Najib.

In his witness statement, Shahrol Azral said he was powerless in making decisions for the company as Najib had absolute power to make all decisions pertaining to the directions, business, administration and operations of SRC International.

This he said included in respect of the RM4 billion loan from the Retirement Fund Incorporated (KWAP) — a statutory body which manages the pension scheme for Malaysia’s civil servants — that was utilised and disbursed.

"As a mere director and just one of the many directors of the board, I do not have the power to make any decision in respect of the said RM4 billion loan from KWAP.

"The board of directors and management of the plaintiff made decisions pertaining to the administrative affairs and daily operations of the plaintiff.

"This did not include matters pertaining to the RM4 billion fund from KWAP. The board was however compelled by the first defendant (Najib) and/or Nik Faisal Ariff Kamil to pass the relevant board resolutions to endorse whatever decisions made by the first defendant,” he said.

Nik Faisal Ariff Kamil was the former chief executive of SRC International.

Evidence before the court also showed that a total of US$1.18 billion was transferred out of SRC International into various intermediaries between December 2011 and April 2014.

In his testimony, Shahrol Azral said he was appointed director in August 2011. He resigned in May 2012.

Explaining further, Shahrol Azral said the sole and exclusive shareholder of SRC International was the Minister of Finance (Incorporated), and as such the board of directors was bound to heed the advice of Najib as finance minister at that time.

"In addition, the first defendant was also an Advisor Emeritus to SRC International.

"Article 117 of the company’s Articles of Association provides that the advice of the Advisor Emeritus in respect of material matters and matters of strategic interests to Malaysia shall be given due consideration and implemented by the board of directors of the company,” he said, adding that Najib had the power to appoint and remove directors as well.

As for Najib’s claim for indemnity and contribution in this third party action against him, Shahrol Azral said he should not be jointly held liable with Najib for the losses SRC International incurred in the event the court ruled against the former prime minister.

"I deny the first defendant’s claim that the loss and damage suffered by the plaintiff was caused inter alia by my acts, omissions, wrongdoings, breaches of statutory, common, fiduciary and/or other duties as well as the order prayed by the first defendant that I pay loss and damage proven to have been suffered by the plaintiff.

"I deny the first defendant’s allegation that I am guilty of acts, omissions, wrongdoings, breaches of duties and conduct which constitute the effective and actual cause of any purported loss and damage claimed to be suffered by the plaintiff.

"In view of the absolute power and control exercised by the first defendant over the plaintiff, I reiterate that my duty and role as a director only exists in name and could not be exercised by me in reality,” he said.

Shahrol Azral reaffirmed that he was never brought to face any criminal charges over SRC International’s loss and damages in respect of the misappropriation of the RM4 billion fund from the KWAP loans.

"On the contrary, the first defendant has been convicted and sentenced by the High Court and his conviction was confirmed by the Court of Appeal and his appeal to the Federal Court has been dismissed,” he said.

The hearing before Commercial High Court judge Datuk Ahmad Fairuz Zainol Abidin resumes tomorrow.

Imprisoned since August 23, 2022, Najib is serving his 12-year jail sentence and RM210 million fine for his conviction over the misappropriation of SRC International’s RM42 million funds, which has recently been reduced to six years of jail and RM50 million fine by the Pardons Board.

SRC, under its new management, had filed legal action against Najib and its former directors Suboh, Mohammed Azhar Osman Khairuddin, Nik Faisal Ariff Kamil, Datuk Che Abdullah @ Rashidi Che Omar, Shahrol Azral and Tan Sri Ismee Ismail in May 2021.

However, later, it removed six names from the suit and retained Najib as the defendant.

Additionally, Najib has brought the former named SRC International directors as third-party respondents.

SRC as a plaintiff in the writ of summons had alleged that Najib had abused his power and obtained personal benefits from SRC International’s funds as well as misappropriated the funds. Najib was SRC’s Emeritus Advisor from May 1, 2012, until March 4, 2019.

SRC International, which is now wholly owned by the Ministry of Finance Incorporated (MoF Inc), is seeking general damages, exemplary, additional interest, costs and other appropriate relief provided by the court.

SRC International is currently seeking a declaration from the court that Naijib is liable to account for the company’s losses due to his breach of duties and trust.

The company is also seeking an order that Najib pay the US$1.18 billion in losses it suffered, and damages for breach of duties and trust; including an order that Najib compensate the sum of US$120 million which entered his bank account as well.