KUALA LUMPUR: Former SRC International Sdn Bhd director told the High Court here today that all aspects of running the strategic investment company were controlled by Datuk Seri Najib Tun Razak, either directly by himself or through his proxy and representative, former SRC chief executive officer (CEO) Nik Faisal Ariff Kamil.
Datuk Suboh Md Yassin, 73, said all major investment and strategic decisions of SRC were to be first referred to Najib for approval as he held the Advisor Emeritus title which caused the powers, roles and functions of the other directors of SRC, including himself were reduced to nothing as they are bound and compelled to follow the directions of Najib.
“Datuk Seri Najib expressed this through the various shareholder minutes issued by him in his capacity as Ministry of Finance Incorporated or through Nik Faisal’s directions which the latter said to be expressed on behalf of Najib.
“SRC is unlike any other private limited company where in other such companies, as a matter of common practice and law, the directors are conferred the power to make decisions independently. SRC has a peculiar setup,“ said Suboh while reading his witness statement during examination-in-chief by counsel Abraham Au representing SRC.
Suboh is testifying as a third-party respondent in SRC International’s US$1.18 billion civil suit against Najib and Nik Faisal, who is currently at large.
Further questioned by Au on what he meant when he said ‘SRC has a peculiar setup’, Suboh explained even though SRC is a private limited company, the way it was run, its corporate governance, setup, objects and operation were, in reality, an extension of governmental activities of the Ministry of Finance.
“Datuk Seri Najib had full and absolute control over all aspects of the running of SRC, to the exclusion of the Board, I felt that my role in SRC was not any different from being a civil servant where we were accustomed and expected to strictly follow all directions from the top, in this case, it is from the Prime Minister.
“If the top required us to do something, we were not in any position to object or to override any decision that we were instructed to implement and to take all necessary steps to give effect to the underlying transactions of these instructions,“ said Suboh.
He further explained one strikingly peculiar feature in which decisions are implemented is the practice of “shareholder instructions” conveyed by way of shareholder minutes.
“Important matters concerning financing, opening of bank account, appointment of CEO, legal counsel, company secretary, establishment of subsidiary and formation of joint venture companies were contained in shareholder minutes issued by Datuk Seri Najib.
“In certain instances, the shareholder minutes would take place even before any director’s circular resolution was signed by the Board and sometimes, the director’s circular resolution and the shareholder minutes are dated the same,“ he said, adding that the actual execution of the decisions made was within the purview of Nik Faisal.
Suboh stated that given Najib’s overwhelming presence and authority, the company directors felt obligated to follow his instructions as part of their fiduciary and statutory duty to act honestly and in the best interest of SRC and the nation.
Meanwhile, he said Nik Faisal would only approach him on occasion when he needed Suboh’s signature on documents and initially, the witness would query the purpose of the documents he required to sign.
“My queries would regularly be brushed aside with a statement suggesting that underlying transaction must be done at the behest of Datuk Seri Najib, for example ‘boss nak lah’ (boss was referring to Najib) or ‘diminta pihak atas’ (pihak atas also referring to Najib).
“There were times when he would not even see me and eventually he would instruct a runner to bring the documents for me to sign there and then and these documents would then be brought back by the runner. Most of the time, the document to be signed by me had already been signed by Nik Faisal,“ said Suboh.
During cross-examination by Najib’s counsel Muhammad Farhan Muhammad Shafee, Suboh explained that Nik Faisal was the only contact point between the board and Najib, suggesting it was Nik Faisal who spread the fear of Najib’s power to “hire and fire” the board members.
“In running the company, the contact point for us is Nik Faisal. None of us know anything, we were denied any information,“ he testified.
The trial before Judge Datuk Ahmad Fairuz Zainol Abidin continues tomorrow.
SRC, under its new management, filed the suit in May 2021, claiming that Najib had committed a breach of trust and power abuse, personally benefited from the company’s funds, and misappropriated the said funds.
It also seeks a court declaration that Najib is responsible for the company’s losses due to his breach of duties and trust and for Najib to pay back the RM42 million in losses that they have suffered.
