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Najib’s SRC trial: KWAP breached its investment policy on initial RM2 billion loans

May 7, 2019

Former KWAP assistant vice president Amirul Imran Ahmat is pictured at the Kuala Lumpur High Court May 6, 2019 May 6, 2019. — Picture by Firdaus Latif

KUALA LUMPUR, May 6 — The Retirement Fund Incorporated (KWAP) breached its Investment Policy and Guidelines (IPG) when it approved a loan of RM2 billion to 1Malaysia Development Berhad’s (1MDB) wholly-owned subsidiary, SRC International Sdn Bhd in 2011, the High Court was told today at Datuk Seri Najib Razak’s trial.

The prosecution’s 29th witness Amirul Imran Ahmat testified that rules under Paragraph 5 of the IPG were infringed upon when SRC International obtained a total of RM4 billion from KWAP in two separate loan agreements of RM2 billion each in 2011 and 2012 respectively.

“This is because the loan to SRC had exceeded the company’s shareholders’ equity limit as they had only RM1 million in total equity but the loan applications that have been authorised amounted to RM4 billion,” he said, referring to SRC International.

Amirul Imran previously worked as KWAP’s Fixed Income Department assistant vice-president from January 2011 to August 2013, and was involved in the approval procedures that went on to approve the eventual RM4 billion loan afforded to SRC International.

Apart from Paragraph 5, Amirul Imran also said KWAP flouted Paragraph 2 of the IPG whereby KWAP’s investment in the form of loans cannot exceed 10 per cent of its domestic fixed income investment allocations.

He pointed out that based on both loan agreements signed by SRC International, the money loaned from KWAP cannot be used for other purposes except those stated in the agreement.

“An event of default will take place if such violations were to occur under the knowledge of KWAP before leading to the termination of both agreements, with KWAP claiming back the full loan amount inclusive of interest charged to the borrower,” he said.

Today marks the 13th day of the former prime minister’s trial on seven charges of criminal breach of trust and laundering RM42 million funds belonging to SRC International. It is also the first day of trial after the start of the Muslim fasting month of Ramadan.


From → Malaysia Upclose

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