KUALA LUMPUR, Aug 15 — Former prime minister Datuk Seri Najib Razak would have chosen “pak turut” or “yes men” to be SRC International Sdn Bhd’s directors, if he had wanted to be their puppet master, the company’s former director agreed today.
Tan Sri Ismee Ismail, a former SRC International director, said this while testifying in the High Court in Kuala Lumpur as a third party in the company’s US$1.18 billion lawsuit against Najib.
He confirmed that all the members of SRC International’s board of directors were professionals.
During cross-examination of Ismee, Najib’s lawyer Tan Sri Muhammad Shafee Abdullah suggested: “Now, if Datuk Seri Najib wanted the board to be the puppet and he the puppet master, he would not have chosen such highly-qualified members of the board, who have their own brain, high qualification. Is that a fair statement?”
Ismee replied: “Yes, it is fair.”
Shafee: He would have chosen somebody who is going to be ‘pak turut’, he is not going to choose highly-qualified people.
Ismee: Correct.
Ismee agreed with Shafee that it was “fair” for Najib to have expected the SRC International board of directors to work vigilantly in the company’s interest as that is what the law requires.
Ismee agreed with Shafee’s suggestion that it was fair for the then finance minister to expect the board to make decisions on matters which he had to decide under the law as shareholder of the Finance Ministry-owned company, and for Najib to then look at what the board decided.
Shafee: And there is nothing there that displaces that position, the prime minister or Datuk Seri Najib has not for instance, called you or anybody to say, ‘you guys take my cue or direction and the board shall obey what I decided’. Has he ever done that?
Ismee: No.
Ismee said that Najib had not done this to him, and said he had not heard any rumours of other SRC International directors experiencing such directions from Najib.
![Datuk Seri Najib Razak is pictured at the Kuala Lumpur High Court Complex, August 15, 2024. — Picture by Yusof Mat Isa](https://www.malaymail.com/malaymail/uploads/images/2024/08/15/229132.jpg)
During the hearing today, Shafee also read out two new changes to SRC International’s company constitution which were approved in April 2012 and made in May 2012 which gave then-PM Najib additional powers. These two changes to SRC International’s company constitution are Article 117 and Article 118.
Article 117 appoints the prime minister as SRC International’s adviser emeritus and states that the adviser emeritus shall advise the board on strategic matters and the board shall give consideration and implement any advice in the best interests of the company.
Article 118 says the prime minister may appoint other special advisers to SRC International with the appointment and term to be determined by the prime minister and endorsed by the board.
Najib was SRC’s adviser emeritus from May 1, 2012, until March 4, 2019. No other advisers were appointed to SRC International.
Ismee had said Article 117 and Article 118 had displaced the SRC International’s board of directors as the most powerful or dominant organ of the company and also displaced their duties and diluted their powers.
Agreeing that adviser emeritus meant “honorary adviser”, Ismee told Shafee there was “nothing wrong” with Article 117 and Article 118.
Shafee: If SRC which is supposed to be one of the powerhouses, it is meant to be a powerhouse as a government company like Petronas, like 1MDB. If Article 117, 118 was suggested by someone other than the prime minister and then endorsed, you agree there is nothing wrong with those powers given to the prime minister.
Ismee: Nothing wrong.
Ismee agreed with Shafee it would be good for the company for the prime minister to keep advising on matters of strategic interest, and agreed that adverse inference cannot be drawn against the prime minister just because of Article 117 and 118’s introduction.
Ismee agreed that there is nothing wrong with the prime minister’s powers to overrule the Petronas board as it is necessary to run a company like that.
Later when asked by SRC International’s lawyer P. Gananathan, Ismee said the board of directors did not deliberate on the need to introduce Article 117 and Article 118 into SRC International’s company constitution. Ismee said that the idea for these two changes did not originate or come from the board.
The hearing before High Court judge Datuk Ahmad Fairuz Zainol Abidin is scheduled to resume on September 17, which is also when Najib is expected to testify.
In May 2021, SRC International, under its new management, sued Najib and its former directors Datuk Suboh Md Yassin, Datuk Mohammed Azhar Osman Khairuddin, Nik Faisal Ariff Kamil, Datuk Che Abdullah @ Rashidi Che Omar, Datuk Shahrol Azral Ibrahim Halmi, and Ismee.
SRC later removed the six SRC International former directors from the lawsuit and only kept Najib as the defendant it was suing.
But Najib then brought back all the six former directors as third-party respondents.
In the lawsuit, SRC International alleged that Najib abused his power and personally benefited from and misappropriated the company’s funds, and is seeking compensation as well as a court declaration that Najib is liable for the company’s losses due to his alleged 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.
Najib, who has been in prison since August 23, 2022 over the misappropriation of SRC International’s RM42 million, was dressed in a light grey suit and was present in the courtroom today.