Najib’s SRC International Trial. Day 17. 14 May 2019.

14 May 2019


SRC trial: Najib’s alleged instruction to KWAP to approve loan not in minutes

KUALA LUMPUR: Datuk Seri Najib Razak’s alleged instructions to the Retirement Fund Incorporated (KWAP) to approve loans to SRC International Sdn Bhd in 2011 were not recorded in the fund’s investment panel meeting minutes, the High Court heard.

Azlida Mazni Arshad, who is KWAP’s Legal and Secretarial Department vice-president, admitted this on Tuesday (May 14) when questioned by defence counsel, Harvinderjit Singh during the former prime minister’s corruption trial involving RM42mil in SRC International funds.

She had last week said in court that Najib urged the retirement fund to rush the approval for a RM2bil loan to SRC International Sdn Bhd in 2011.

On Tuesday, the 17th day of the trial, Azlida also admitted that KWAP’s fixed income department (FID) could have rejected SRC International’s loan application.

KWAP approved the RM2bil loan to SRC International in 2011 before approving another loan of the same amount in 2012.

The court had heard in previous testimony that SRC International wanted a loan to get into the business of natural resources such as oil and gas, iron and steel and coal and uranium.




All eyes will be on the line of questioning that Najib Abdul Razak’s defence team has prepared for the cross-examination of Azlida Mazni Arshad in the former prime minister’s SRC International trial at the Kuala Lumpur High Court at 9am this morning.

This is due to Azlida’s testimony during the prosecution’s examination-in-chief on Thursday last week.

She is the 35th witness and Retirement Fund Incorporated (KWAP) vice-president of legal and secretarial affairs.

Azlida testified as to how the then premier Najib had urged the retirement fund for public servants to expedite the approval of a RM2 billion loan to SRC International.

The hearing before judge Mohd Nazlan Mohd Ghazali was told that the accused made the request through then KWAP chairperson Wan Abdul Aziz Wan Abdullah.

She said this was followed by KWAP’s then CEO Azian Mohd Noh briefing the fund’s special investment panel in a July 19, 2011 meeting. The witness had minuted the meeting.

Witness: KWAP fixed income dept could’ve rejected SRC loan bid

12pm – Retirement Fund Inc (KWAP) vice-president (legal and secretarial affairs) Azlida Mazni Arshad (photo) testifies that the fund’s fixed income department (FID) could have rejected SRC International’s loan application.

During cross-examination by defence counsel Harvinderjit Singh, she agrees that there are two levels of authorisation that need to be passed before a panel investment paper prepared by FID personnel is presented to the KWAP investment panel.

Azlida also agrees that the two authorities involved – namely the head of department for FID, and KWAP CEO – could choose not to sign the paper should they feel that something is not right.

Harvinderjit: If a member of FID finds that loan applicant is questionable, would they put this (concern) in paper?

Azlida: Yes.

Harvinderjit: You have a vice-president (in charge) of FID. There is no compulsion for them to sign (papers)?

Azlida: Yes.

Harvinderjit: In fact if anybody force them to sign, will a police report be lodged?

Azlida: Yes.

Harvinderjit: Having signed the investment paper, FID members are bound to what they say?

Azlida: Their proposals? Yes.

Harvinderjit: (refers to an investment panel paper) Here we have 19/2011 investment panel paper. Prepared by FID?

Azlida: Yes.

Harvinderjit: Page 14. In preparation of this (paper), there’s two layers. The HOD (head of department) and CEO?

Azlida: Yes.

Harvinderjit: If any of three persons (HOD, CEO, and person preparing the paper) find anything lacking in the investment paper, they can choose not to sign?

Azlida: Yes.

Harvinderjit: It is their duty to act in the best interests of KWAP?

Azlida: Yes.

The witness, in her testimony, also agrees to a question put by Harvinderjit that the panel investment paper prepared by FID was a recommendation to the investment panel, and that it was approved by the head of FID and KWAP CEO.

Harvinderjit: The panel was invited to deliberate and consider on the following. The FID did not recommend this?

Azlida: They recommended it.

Harvinderjit: When members of the FID have prepared and HOD reviewed (a paper), and signed off there, we take it as though they are representing to the CEO and investment panel, that whatever is being proposed and recommended here should be seriously considered by the investment panel?

Azlida: Yes.

The court then takes a short break. It is expected to resume with more questions by Harvinderjit.


KWAP investment panel not bound by external orders

12.25pm – Witness Azlida Mazni Arshad testifies that KWAP’s investment panel is not bound by the instruction of any person or body regarding matters under the purview of the retirement fund for public servants.

During cross-examination by accused Najib Abdul Razak’s lawyer Harvinderjit Singh, the 35th witness agrees with the question by the lawyer on the matter.

Harvinderjit refers to section 14 of the Retirement Fund Act 2007, which states that the panel can only decide on loans for investment-related matters which brings profits to the fund.

Harvinderjit: The investment panel cannot approve loans where terms are not remunerative to the fund?

Azlida: Yes.

Harvinderjit: Otherwise, they commit a criminal offence where they face a possible RM2 million fine or maximum 10 years’ jail. Every investment panel member is bound by this?

Azlida: Yes.

Azlida also confirms to Harvinderjit that the panel does not need to secure ministerial approval.

In response to his query whether the panel is bound by the instruction of the prime minister, deputy prime minister or any other minister, she merely says, “Ideally they are not bound.”

Minutes don’t show Najib coerced KWAP investment panel – witness

12.45pm – 35th witness Azlida Mazni Arshad testifies that the KWAP investment panel minutes did not show that panel members were coerced by then prime minister Najib Abdul Razak to approve a loan totalling RM4 billion to SRC International.

The KWAP vice-president says this during cross-examination by Najib’s counsel Harvinderjit Singh.

Harvinderjit: There are no minutes on the KWAP investment panel saying they approved the loan because it was instructed by the prime minister (Najib in 2011 and 2012)?

Azlida: Not in the minutes.

Harvinderjit: If it were true, it would have been in the minutes?

Azlida: Yes.

Harvinderjit: There were no minutes of the investment panel where it was noted that they (KWAP investment panel members) had no choice but to approve the loan to SRC International, (regardless of) whether it was for the first or second loan?

Azlida: Yes.

Harvinderjit: Otherwise, they would have breached their duty to KWAP?

Azlida: Yes.

Najib’s note was a request, not order’

12.50pm – Witness Azlida Mazni Arshad of KWAP testifies that a handwritten note by then prime minister Najib Abdul Razak indicating his approval for SRC International’s request to secure a loan from the retirement fund in 2011 was only a request, instead of an instruction.

She also agrees with defence counsel Harvinderjit Singh that KWAP’s fixed income department also understood that Najib’s note was not an instruction.

As such, Azlida confirms, this is why the department went on to propose an RM1 billion loan for SRC International, instead of RM3.95 billion as applied for by the 1MDB subsidiary.

On May 2, another KWAP employee named Amirul Amran Ahmat had testified that Najib had indicated his approval for SRC International’s request for a loan from the retirement fund through a handwritten note.

The note, which stated “Agree with KWAP giving the loan to SRC”, was written on a letter sent to the then premier by SRC International on June 3, 2011.

The letter was an application by SRC International for a RM3.95 billion loan from KWAP for the purpose of “modal pusingan” (working capital) and unrestricted general investment.

The court then takes a 30-minute break and will resume at 1.40pm tentatively.

Witness: I wasn’t there when Najib communicated on RM2b loan

2.25pm – KWAP vice-president of legal and secretarial affairs Azlida Mazni admits that she was not personally present at the time when then prime minister Najib Abdul Razak allegedly communicated for the retirement fund for public servants to expedite the RM2 billion loan application to SRC International.

The 35th witness made the admission during cross-examination by Najib’s lawyer Harvinderjit Singh.

Harvinderjit: You were not there during the (actual) communication (by Najib to then KWAP chairperson Wan Abdul Aziz Wan Abdullah)?

Azlida: Yes.

Harvinderjit: Any such (alleged) communication was based on the (KWAP) CEO (chief executive officer) reporting (to KWAP special investment panel meeting)?

Azlida: Yes.

Previously, the witness testified that KWAP’s then CEO Azian Mohd Noh had informed the panel meeting on July 19, 2011, regarding the purported urging by Najib to Wan Abdul Aziz.






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