KUALA LUMPUR — July 10, 2019: A valuation by the finance ministry decided that a loan application of RM3.95 billion by SRC International was too huge and had the risk of over-concentration and thus recommended only RM1 billion.
But even the reduced amount was raised to RM2 billion by former prime minister Datuk Seri Najib Razak who decided that the smaller amount was insufficient.
This decision on the loan from the Retirement Fund Incorporated (KWAP) was made at a meeting between Najib and former secretary-general of the Finance Ministry Tan Sri Dr. Wan Abdul Aziz Wan Abdullah at the former’s office.
According to Wan Aziz, after the valuation by the fixed income department, KWAP only agreed to give RM1 billion, taking into consideration the risk of over-concentration because the RM3.95 billion asked for was very big and concentrated only on one company and one industry.
This was mentioned in the investment panel paper tabled before the KWAP investment panel. The paper was to assist the KWAP panel to decide whether or not to approve the RM1 billion loan to SRC for the purpose of revolving capital and general investment.
The panel however decided to postpone approval until further information was obtained from SRC.
Wan Aziz also said that at the meeting, one of the panel members suggested that Najib be informed of KWAP’s decision to propose a loan of only RM1 billion.
Wan Aziz and Datuk Azian Mohd. Noh, the KWAP chief executive officer at the time, then met Najib to inform him of the panel’s decision before he again met Najib and was told RM2 billion would be sufficient.
The retired civil servant said had there been no communication from Najib regarding the amount, KWAP would have approved only RM1 billion.
When cross-examined by counsel Farhan Read, the witness said the application still needed to go through normal procedures despite a letter from Najib.
Najib, 66, is facing several charges involving RM42 million from SRC International.
Hearing before justice Mohd. Nazlan Mohd. Ghazali continues.