KUALA LUMPUR — Former Malaysian prime minister Najib Razak insisted on Wednesday (Dec 11) that he was not obliged to tell his own Cabinet how SRC International used a whopping RM2 billion (S$653 million) loan from Malaysia’s second-largest pension fund in 2011, despite his twin role as the prime minister and finance minister then.

Najib was also then chairman of 1Malaysia Development Berhad (1MDB) which was the parent company of SRC International at that time, and had also issued a handwritten letter to the Retirement Fund Incorporated (KWAP) to approve the loan.

Najib, on trial for allegedly siphoning RM42 million from the investment company, was testifying in his own defence under questioning from Attorney General Tan Sri Tommy Thomas.

Mr Thomas: "Do you agree that it was your duty as the finance minister and prime minister to disclose how the first RM2 billion loan from KWAP, after being disbursed, was spent by SRC?"

Najib: "I disagree."

The Pekan Member of Parliament told Mr Thomas earlier that he did not probe the SRC International board further after they had only disclosed to him that funds from the first RM2 billion loan were used for investment purposes.

The prosecutor had grilled Najib to explain why he did not question the board on the necessity for SRC International to acquire a second RM2 billion loan from KWAP, six months after obtaining the first loan in August 2011.

Mr Thomas: "This was six months after the first loan, that happened in February 2012 with the disbursement of the first loan that was at the end of August 2011, you are involved in SRC and in your position as the minister of finance, mentioned the government guarantee and loan for the second time. Your first question would be ‘what happened to the first RM2 billion in the first six months’. Did you ask this?"

Najib: "Yes, I asked this."

Mr Thomas: "What was said?"

Najib: "That it was set aside for investment purposes, for targeted investment purposes."

Mr Thomas: "Whether it remained as cash in bank, did you ask?"

Najib: "I am not sure. But I asked them and they said it was for investment purposes."

Mr Thomas: "Did you ask anything further, as to where the funds were?"

Najib: "I didn’t ask them further."

Mr Thomas: "But you were prepared to support the second government guarantee?"

Najib: "Yes."

Mr Thomas then suggested that Najib, in his capacity as the prime minister while holding the portfolio of the finance ministry, had acted wrongly by not seeking more information as it was his prerogative, to which Najib again disagreed.

But Najib agreed when asked if the second loan sought by SRC International from KWAP was approved based on the security of another government guarantee, which he endorsed.

Najib has been called to enter his defence to answer seven charges related to SRC International.

Three are for criminal breach of trust over a total RM42 million of SRC International funds while entrusted with its control as the prime minister and finance minister then, three more are for laundering the RM42 million, and the last is for abusing the same positions for self-gratification of the same sum. MALAY MAIL