SRC directors free to resign if they disagree with company's decision, High Court heard

KUALA LUMPUR - Datuk Seri Najib Razak told the High Court, here, today, that the board of directors (BOD) of SRC International Sdn Bhd is free to resign if they disagree with the company’s decisions, or feel that government directives are influencing its direction.

Citing a past example, Najib, 71, said that former 1Malaysia Development Berhad (1MDB) chairman, Tan Sri Mohd Bakke Salleh, stepped down in October 2009 from 1MDB amid similar concerns.

"Anyone who doesn't agree with the company, in toto, they can always resign or have a meeting with me and say "look I disagree with what you have us to do”. There is a basis for the matter to be further discussed and decided.

"As (then) prime minister (PM), I would not do anything against the interest of the company, as I have sworn under the Constitution to protect the company," said Najib while answering a question under cross-examination by counsel Datuk Dr Gurdial Singh Nijar who is representing third-party respondent and former SRC director Datuk Suboh Md Yassin.

Gurdial was asking Najib about the transfer of RM2 billion out of SRC, and what expectations he held for the directors regarding instructions he allegedly greenlighted as the sole shareholder of SRC.

Najib further said that the BOD had adhered to his strategic direction for the company, however, the way in which they executed this direction proved detrimental to the company's interests.

He acknowledged that it was reasonable for the BOD to follow his guidance, but emphasised that their implementation must comply with legal standards and prioritise the company's best interests.

"Even when pursuing national objectives, they are still required to adhere to legal standards and the company’s Memorandum and Articles of Association (M&A)," he explained.

Najib also addressed a misunderstanding raised by Gurdial, who implied that he was the ‘father’ of SRC.

Najib: I have to correct you. If you say that SRC is my baby, I am definitely not the father.

Gurdial: Okay, fine. That means we have mistaken, in categorising you as a visionary in this (setting up of SRC).

Najib: Visionary is okay, but as the ‘father’ of SRC? Definitely not... because we have documents to show that it was never my idea.

In May 2021, under the new management, SRC filed the lawsuit, accusing Najib of breach of trust, abuse of power, personally benefiting from the company’s funds and misappropriating the said funds.

SRC International previously removed five of its directors from the lawsuit, retaining Najib as the sole defendant. However, the High Court permitted Najib to issue third-party notices against them.

The company is seeking a court declaration, holding Najib accountable for the company’s losses due to his alleged breach of duties and trust, and for him to compensate the RM42 million in losses that they have incurred.

The trial before Judge Datuk Ahmad Fairuz Zainol Abidin, continues on Oct 24. - BERNAMA