SRC International Sdn Bhd is seeking to recover RM42 million allegedly misappropriated from its funds and transferred into Datuk Seri Najib Razak’s personal bank accounts, with the High Court hearing that the imprisoned former prime minister exercised extensive control over the company through multiple roles.
Wrapping up SRC International and subsidiary Gandingan Mentari Sdn Bhd’s civil suit against Najib, SRC lawyer Kwan Will Sen said the company failed to achieve any of its objectives despite securing RM4 billion in loans from Retirement Fund Incorporated (KWAP).
The loans, comprising two RM2 billion facilities, were backed by government guarantees that Kwan said were "personally procured" by Najib in his capacity as prime minister and finance minister at the time.
"SRC was a victim of a systematic fraud. It defaulted entirely on its loans, leaving the Malaysian government, and ultimately the rakyat, to bear the consequences. Of the monies lost, RM42 million reached the personal accounts of Najib," he said.
Kwan said Najib exercised significant control over SRC while simultaneously holding four key positions: prime minister, finance minister, the controlling mind of Ministry of Finance Incorporated (MOF Inc), SRC’s sole shareholder, and the company’s adviser emeritus.
"He appointed SRC's board. He appointed the managing director. He procured KWAP loans before the Board was even constituted. The former directors were accustomed to acting on his directions, conveyed through his proxy (former chief executive officer) Nik Faisal (Ariff Kamil) or through shareholder resolutions,” Kwan said.
Nik Faisal remains a fugitive after leaving the country.
The civil suit concerns RM42 million allegedly misappropriated from SRC between December 2014 and February 2015 and transferred into Najib’s personal bank accounts.
SRC is suing Najib for knowingly receiving trust property, breach of fiduciary duties as a shadow director and the tort of misfeasance in public office.
The RM42 million is the same sum involved in Najib’s SRC criminal case, in which he was convicted of criminal breach of trust, money laundering and abuse of power and is currently serving a prison sentence.
Najib disputes control, challenges limitation period
SRC’s case is that Najib was its shadow director and therefore owed fiduciary duties to the company.
Najib has denied this, maintaining that the company’s directors were responsible for its day-to-day management and that his role was limited to providing overarching guidance.
He has also named several former SRC directors as third-party defendants in the civil proceedings.
They include Datuk Suboh Md Yassin, Datuk Mohammed Azhar Osman Khairuddin, Datuk Shahrol Azral Ibrahim Halmi, Tan Sri Ismee Ismail and Datuk Che Abdullah @ Rashidi Che Omar.
Najib’s counsel Muhammad Farhan Shafee also argued that the RM42 million claim was filed outside the statutory limitation period.
The suit was filed on May 7, 2021, more than six years after the alleged transactions between Dec 26, 2014 and Feb 10, 2015.
Farhan said the latest date relevant to the limitation period was Feb 10, 2015, meaning the claim should generally have been filed within six years of the alleged wrongdoing.
He rejected SRC’s argument that the limitation period only began when the company’s new management discovered the alleged misappropriation in 2019.
Farhan said there was no evidence showing how or precisely when the new management discovered the alleged wrongdoing.
He also pointed out that none of the company’s 2019 management members had testified on the issue of when or how the alleged misappropriation was discovered. - September 3, 2026
