Wednesday, July 24

RM250 million grant approved for SRC CSR project did not meet company procedures — Suboh

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KUALA LUMPUR: The High Court here was told yesterday that a corporate social responsibility (CSR) project by SRC International Sdn Bhd (SRC), involving RM250 million grant to help flood victims in the East Coast, did not meet company procedures, but was approved by the “people higher up”.

A former non-executive director of the company, Datuk Suboh Md Yassin, 68, said SRC had appointed Ihsan Perdana Sdn Bhd (IPSB) to handle the project and given an allocation of RM250 million.

Suboh, who is the 42nd witness to testify in former Prime Minister Datuk Seri Najib Tun Razak’s trial for allegedly misappropriating SRC funds totaling RM42 million, said the appointment of IPSB to handle the project was made by him and SRC chief executive officer Nik Faisal Ariff Kamil.

“To me, the amount of the grant is huge and should have gone through the existing procedure by obtaining written approval through a resolution by the Board of Directors. I raised the question on the company regulations and the issue on compliance because the RM250 million grant involved the use of SRC fund.

“Everytime I raised the issue, Nik Faisal said ‘it will be taken care of’ and this had been approved by the people higher up,” Suboh said when reading out his witness statement during examination-in-chief by deputy public prosecutor Datuk Ishak Mohd Yusoff.

He said in his opinion, the “people higher up” referred to by Nik Faisal was Najib as the emeritus adviser of SRC.

As such, Suboh said he chose to remain silent and the matter was no longer discussed.

He said the RM250 million allocation for the project was approved with the condition that IPSB would carry out the SRC work, which included poverty eradication programme, development and repair of public infrastructure, and to report what it did to SRC.

“If there is excess in the grant, what is left should be returned to SRC before the expiry of the grant period. However, IPSB had never given any feedback on the matter and I do not know if IPSB returned the balance to SRC,” he added.

Suboh said most of the actions concerning SRC were carried out by Nik Faisal, as its chief executive officer, including tabling working papers to the Board of Directors, as well as to do follow-up action for projects to be carried out by SRC.

Referring to two sets of letters, a Facility Agreement and a Letter of Guarantee Relating To The Financing Facility Agreement of RM2 Billion Granted to SRC International Sdn Bhd, dated Aug 26, 2011, and March 27, 2012, respectively, Suboh said he did not know much about them as everything was handled by Nik Faisal.

The letter of guarantee was signed by Najib as the Prime Minister and Finance Minister, he added.

“Of the total of RM4 billion, about 90 per cent was invested by SRC into various foreign portfolio investments. The remaining financing of RM400 million was for its operation and investments in the country.

“About RM40 million more was used for purchase of property and later sold to a SRC subsidiary, Gandingan Mentari Sdn Bhd,” he added.

Najib, 66, is charged with three counts of criminal breach of trust, one count of abusing his position and three counts of money laundering involving SRC International Sdn Bhd funds amounting to RM42 million.

The hearing was held before judge Mohd Nazlan Mohd Ghazali and continues on July 1 with Suboh to continue his testimony. — Bernama