KUALA LUMPUR (Oct 17): Imprisoned former prime minister Datuk Seri Najib Razak did not check with SRC International Sdn Bhd's board on why the company needed a further RM2 billion loan as he expected them to do the necessary due diligence, the High Court heard on Thursday.

The company, which was incorporated in 2011 and established to seek alternative energy sources, had applied for additional funding, despite a lack of concrete developments from its first Retirement Fund Inc (KWAP) RM2 billion loan, which was government-guaranteed.

Najib, 71, said that he communicated with the management about "imminent investments" in the energy field, and it was up to the then SRC chief executive officer Nik Faisal Ariff Kamil, who is currently at large, to deal with the board.

The former PM added that he had full faith in the board to do the necessary to ensure that everything was by the book.

SRC counsel P Gananathan: All you did was agree with Nik Faisal's proposal (for additional funding) and forwarded it to the Economic Planning Unit (EPU). You asked no questions as finance minister? You asked no additional questions?

Najib: It is for Nik Faisal to deal with the board. All along I had faith in the board.

Gananathan: [The board who] you did not revert to...

Najib: It's not for me to deal with the board, [that is the] management['s duty].

The ex-PM is currently testifying in his defence in the civil suit brought against him by SRC concerning a RM4 billion loan from KWAP, which was given to SRC in two tranches in the second half of 2011 and the first half of 2012. The company claims that US$120 million had eventually ended up in Najib’s bank account.

On Thursday, the former PM also stressed that the additional funding was subject to the due diligence process and that the board could have rejected it, but they also agreed to it, subject to proper due diligence.

The company, whose goal was in line with national development policy of securing economical and continuous supply of energy, was once a 1Malaysia Development Bhd (1MDB) unit, but came under Ministry of Finance Incorporated (MOF Inc)'s umbrella in 2012.

In 2010, 1MDB had requested a RM3 billion grant to set up a special purpose vehicle, SRC. It was granted RM20 million, which led them to turn to KWAP for funding.

"The request for a government grant must go through process, must go through EPU because [it concerns the country's] development budget. That's why I was confident that there will be a process. I can't just approve arbitrarily,” said Najib.

"[The additional loan] is subject to the process. In the end, they didn't get what they requested. They didn't get it," he said.

Najib also reiterated that he could not keep tabs on every nitty-gritty detail related to the company. That, he said, was left to the board and the management.

He also testified that the idea that he take the SRC's "Advisor Emeritus" position didn't stem from him, but was presented to him. He however could not recall who presented the idea.

SRC filed the civil suit against Najib and Nik Faisal in May 2021.

The company is seeking a declaration from the court that Najib is liable to account for the company's losses of US$1.18 billion due to breach of duties and trust. It is also asking for an order for Najib to compensate US$120 million and Nik Faisal to pay US$2 million to SRC, and for the company to be entitled to trace the amount in general, exemplary, and aggravated damages.

This is different from Najib's criminal case where he was found guilty of criminal breach of trust, money laundering, and abuse of power of SRC funds amounting to RM42 million which was received between Dec 26, 2014 and Feb 10, 2015.

The company had obtained a judgement in default against Nik Faisal in November 2021, after he failed to enter an appearance in the matter.

The trial before High Court judge Datuk Ahmad Fairuz Zainol Abidin continues on Oct 18.