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SRC International known to MoF as company with bad supervision, High Court told

July 19, 2019

Former deputy secretary-general (Systems and Controls) at the Finance Ministry, Datuk Fauziah Yaacob, is pictured at the Kuala Lumpur High Court July 18, 2019. — Picture by Ahmad Zamzahuri

KUALA LUMPUR, July 18 — SRC International Sdn Bhd was a company with poor supervision and inefficient in reporting its financial performance to related regulators within the Ministry of Finance (MoF), the High Court here heard today.

The former deputy secretary-general of the Investment Treasury Department within the MoF, Datuk Fauziah Yaacob, told the court how SRC International were known for being late with their submissions of performance reports, including information on investments undertaken by the company.

Fauziah, who retired in November 2015, explained how the Government Companies Investments division under her department were tasked to oversee about 120 companies owned by the government through the MoF, among them SRC International and 1Malaysia Development Berhad (1MDB).

“There was information sought from SRC International but nothing was handed over to the ministry. There was no proper supervision (within the company).

“The Ministry of Finance had then suggested appointing someone onto the board of SRC, so there was a memo to appoint Datuk Mohd Isa Hussain as an MoF corporate representative,” she said.

Fauziah, the prosecution’s 53rd witness in Datuk Seri Najib Razak’s ongoing RM42-million SRC International corruption trial, made the revelation during the examination in chief by Deputy Public Prosecutor Datuk Suhaimi Ibrahim.

She said the memo was then made in March 2015 to appoint Mohd Isa, which was subsequently approved by the then Minister of Finance II Datuk Seri Ahmad Husni Hanadzlah.

“It was stated that the government and the MoF were not clear with the investments undertaken by SRC.

“Also, SRC happens to be a company that always sent reports late to the MoF,” she answered when questioned by Suhaimi as to why MoF saw it necessary to appoint Mohd Isa.

However, she could not confirm if Mohd Isa was indeed appointed onto SRC International’s board of directors, having retired not long after.

During cross examination by Najib’s lawyer Harvinderjit Singh, Fauziah added how officers from MoF had tried to set up a meeting SRC International’s representatives but failed.

“MoF representatives did raise suggestions to have a meeting with SRC’s representatives but it never materialised and there was never any sit down discussions,” she said.

During the course of the trial, witnesses have testified that Retirement Fund (Incorporated) granted a total of RM4 billion in loans in August 2011 and March 2012 to SRC International, with money allegedly flowing through other companies before being transferred into Najib’s accounts.

At the time of the first loan application, SRC International was the wholly-owned subsidiary of 1MDB which was owned by MoF’s Minister of Finance Inc (MoF Inc); while SRC International was parked directly under MoF Inc by the time of the second loan application.

The hearing before High Court Judge Mohd Nazlan Mohd Ghazali resumes on Monday.

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From → Malaysia Upclose

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