Najib SRC trial: Malaysia pension fund paid $1.3b to 1MDB unit

Najib Razak is Malaysia's first former prime minister to stand trial on corruption charges.
Najib Razak is Malaysia's first former prime minister to stand trial on corruption charges.PHOTO: EPA-EFE

Malaysia's civil services pension fund paid a total of RM4 billion (S$1.3 billion) into the bank account of SRC International between 2011 and 2012, the Kuala Lumpur High Court heard yesterday at the corruption trial of former prime minister Najib Razak.

Najib is charged with abuse of power for accepting a RM42 million bribe when he took part or was involved in making the decision to provide government guarantees for a RM4 billion loan from pension fund Kumpulan Wang Persaraan (KWAP) to SRC, a former unit of troubled state fund 1Malaysia Development Berhad (1MDB).

AmBank manager Wedani Senen testified yesterday that the first RM2 billion was wired into SRC's AmIslamic Bank account on Aug 29, 2011, in four equal tranches of RM500 million each.

Another RM2 billion was credited in one lump sum into the same account on March 28, 2012 after a senior manager was asked to approve the transaction.

"We received the funds from KWAP at around 5.40pm, and Bank Negara (the central bank) closed at 6pm. So we had to transfer (the amount) in one lump sum. (And a) senior manager and above can (perform transactions of) this amount," she was quoted as saying by news portal Malay Mail Online.

KWAP, which has a fund size of RM141 billion, had in 2016 defended its decision to lend the RM4 billion to SRC as the loan was guaranteed by the Malaysian government.

Then opposition MPs had raised questions in Parliament over the status of SRC's investment after it was reported that the funds were used to buy coal mines in Mongolia.

Earlier in the trial, the court also heard that a RM2.5 million cheque issued by Najib to his confidant Habibul Rahman Kadir Shah was for the purpose of political intelligence-gathering.

Mr Habibul, who owns the firm HKS Consultant, said the money was meant for the then-ruling Barisan Nasional's (BN) political benefit.

"The money is used to collect intelligence, and... for BN intelligence purposes. I received the cheque personally from Najib at his residence in Putrajaya," he said.

Najib is the country's first former prime minister to stand trial on corruption charges.

When cross-examined by Najib's counsel, Mr Habibul explained that he provided the advice on political analysis and strategy to Najib specifically.

"In politics, you need a certain level of knowledge on what you expect to happen, hence political intelligence. You need networks that will provide information from time to time. Nobody gives information for free," he said.

Najib is the country's first former prime minister to stand trial on corruption charges.

In total, he faces 42 charges of criminal breach of trust, abuse of power and money laundering, including allegations that RM2.6 billion believed to be from 1MDB found its way into his personal account.

1MDB incurred crippling debts of up to RM51 billion, and US prosecutors have alleged that more than US$4.5 billion (S$6.1 billion) was siphoned from its accounts and laundered across the globe.

Najib has denied any wrongdoing and his lawyers are arguing that he was misled and manipulated by certain people who gained from these transactions.

The trial continues tomorrow.

A version of this article appeared in the print edition of The Straits Times on May 01, 2019, with the headline 'Najib SRC trial Malaysia pension fund paid $1.3b to 1MDB unit'. Print Edition | Subscribe