High Court Rules Najib Liable For USD1.3 Billion SRC Losses, Orders Him To Pay The Amount

KUALA LUMPUR, March 31 (Bernama) -- The High Court here today ruled that Datuk Seri Najib Tun Razak is liable for SRC International Sdn Bhd’s USD1.3 billion losses after finding that he had breached his fiduciary duties, abused his position, and misappropriated the company’s funds for personal gain.

Judge Datuk Ahmad Fairuz Zainol Abidin, in allowing the company’s USD1.18 billion lawsuit against the former premier, ordered Najib to pay the amount, in addition to USD120 million that he had received from the company into his AmPrivate banking account ending 964, hence bringing the total to USD1.3 billion.

The court will, however, determine the costs at a later date.

In his judgment,  Justice Ahmad Fairuz, who is now a Court of Appeal judge, held that Najib had abused his public office, enabling SRC to obtain a RM4 billion loan from the Retirement Fund Inc (KWAP) under government guarantee.

“The misuse of authority facilitated the direct offshore disbursement of RM3.6 billion without proper oversight, raising concerns over financial management. The actions led to the misappropriation of USD1.1 billion through fraudulent investment structures.

“As a result, SRC was unable to repay the public loans, prompting a RM600 million government bailout to cover the losses,” the judge said, adding that Najib took no steps to secure the funds and never ordered any investigation into the transactions.

Justice Ahmad Fairuz said the court further observed that but for Najib’s misuse of office, SRC would not have borrowed RM4 billion on ineligible grounds, dispersed RM3.6 billion offshore through fraudulent structures, or lost USD1.2 billion in misappropriated funds.

“Najib’s misfeasance was thus the proximate and effective cause of SRC’s injury. His orchestration of the scheme from inception to dissipation establishes a clear and complete chain of causation, rendering him fully responsible for the losses suffered by SRC,” said the judge.

He further said that SRC had successfully established on a balance of probabilities that part of its funds, namely USD120 million, was traced into Najib’s bank account.

“The plaintiff’s second witness, Angela Barkhouse, an offshore asset recovery specialist, testified in detail how the sum of USD120 million moved from SRC to SRC BVI, then to Blackstone, and ultimately into Najib’s account.

“Each link in that chain is supported by unredacted documentary evidence showing the critical transaction particulars. From her explanation, this court was able to clearly trace when the USD120 million was transferred, through which entities it passed, and where it ultimately ended,” said the judge.

Meanwhile, Najib’s claims against third-party defendants were dismissed with costs as the court found that, having exercised control over the company, he could not subsequently attempt to shift liability onto the very individuals he directed, merely because they formally executed the documents implementing his decisions.

“The law on third-party contribution and indemnity does not operate as a mechanism for a primary wrongdoer to divest himself of established liability by shifting blame indiscriminately through the involvement of third parties,” the judge said.

Right after the verdict was delivered, lawyer Tan Sri Muhammad Shafee Abdullah, representing Najib, informed the court that his client would be filing an appeal against today’s decision as well as an interim stay for the payment within 14 days.

The court subsequently granted the interim stay order. Lawyer Datuk Lim Chee Wee acted for SRC. Najib attended today’s proceedings.

SRC initiated the suit in May 2021, alleging that Najib had breached his fiduciary duties, abused power, and misappropriated company funds for personal gain.

SRC initially named Najib, and its former directors, Datuk Suboh Md Yassin, Mohammed Azhar Osman Khairuddin, Datuk Che Abdullah @ Rashidi Che Omar, Datuk Shahrol Azral Ibrahim Halmi, Tan Sri Ismee Ismail and SRC's former chief executive officer Nik Faisal Ariff Kamil, who remains at large, as defendants.

Subsequently, SRC removed six original defendants from the suit, retaining only Najib and Nik Faisal as the first and second defendants.  In 2021, a judgment in default was entered against Nik Faisal, leaving Najib as the sole defendant. Najib subsequently named the former SRC directors as third-party respondents.

The company seeks, among other relief, a declaration of Najib's liability and compensation for USD1.18 billion in losses sustained from his alleged breach of fiduciary duties and trust.

It also seeks quantified damages of USD120 million from Najib and USD2 million from Nik Faisal for fraudulent breach of fiduciary duties and trust.

-- BERNAMA