Ex-SC deputy chief executive is judge in SRC suit against Najib, six others

KUALA LUMPUR (June 4): High Court Judge Datuk Ahmad Fairuz Zainol Abidin is now the judge hearing 1Malaysia Development Bhd’s (1MDB) former subsidiary SRC International Sdn Bhd's lawsuit against ex-prime minister Datuk Seri Najib Razak and six others after High Court Judicial Commissioner Liza Chan Sow Keng recused herself from hearing the case as Najib is her friend.

Securities Commission Malaysia (SC) ex-deputy chief executive Ahmad Fairuz had at 10am today presided at the case’s first case management which was done virtually.

Checks on the court's website show that he will preside at the virtual hearing for the second case management on July 1, 2021.

On Tuesday (June 1), it was reported that Chan recused herself from hearing 1MDB’s lawsuit against a law firm besides another case involving SRC's legal action against Najib and the six others.

It was reported that a lawyer from Rosli Dahlan Saravana Partnership, which is representing 1MDB and SRC, said Chan had during court proceedings via video conferencing on that day informed all parties involved that she had decided to recuse herself from hearing the cases as Najib is her friend.

"Although they have not been in contact for many years, she is of the view that she should recuse herself from this case to avoid any suspicion or accusation of bias or partiality. So, the matter was sent back for case management before a different court and a new date will be fixed soon,” the lawyer was quoted as saying by Bernama.

The Edge, citing court documents, reported on May 10, 2021 that 1MDB filed a claim against Wong & Partners and Chia for a sum of US$1 billion (about RM4.13 billion) and payment of legal fees of RM664,821.21 due to the firm and Chia’s alleged roles in the 1MDB scandal.

On May 11, 2021, news reports, quoting Wong & Partners’ statement, indicated the legal firm said it is "very disappointed" by 1MDB’s decision to file a civil suit against the firm for what Wong & Partners claim is advisory work in relation to 1MDB.

Meanwhile, SRC's RM4 billion lawsuit involves Najib and six others, comprising SRC’s former board members Tan Sri Ismee Ismail, Nik Faisal Ariff Kamil, Datuk Suboh Md Yassin, Datuk Che Abdullah @ Rashidi Che Omar and Datuk Mohammed Azhar Osman Khairuddin besides ex-1MDB CEO Datuk Shahrol Azral Ibrahim Halmi.

The Edge, citing court documents, also reported on May 10, 2021 that SRC had filed the lawsuits against them on May 7, 2021.

It was reported that the writ sighted by The Edge stated that in January 2019, SRC was placed under the new management under the Ministry of Finance (MoF) and thereafter it discovered that the former board of directors did not take any reasonable steps on the proper use of the RM4 billion Retirement Fund (Incorporated) (KWAP) loans given in 2011 and 2012 for its general investment capacities and working capital.

It was reported that the writ alleged that the defendants, including Najib, failed to monitor the disposal of RM3.6 billion to SRC BVI, which was appointed to undertake overseas investment activities in the energy resource sector.

According to the news report, SRC alleged that the defendants failed to ascertain and monitor repayments under the KWAP loan schedule as required, and inquire about the misappropriation of funds.

"The new management, as mentioned in the writ, discovered a significant number of fraudulent and wrongful disbursements, transfers and utilisation of KWAP's RM4 billion loans.

"It (the new management) also discovered that the utilisation of funds was against the nature and business SRC was set up for and incorporated, and the board did not perform due diligence and acted contrary to Bank Negara Malaysia's requirements.

"For this, they are seeking declaration that Najib and the former directors named as defendants are jointly and severally liable to be accountable to SRC as constructive trustees on the grounds of the fraudulent breach of duties, fraudulent breach of trust and breach of trust, and hence an order for all of them to compensate the company.

"They are also alleged to have committed breach of trust, conspiracy, knowing receipt, dishonest assistance, wrongful conversion, abuse of power and misfeasance in public office, resulting in a loss of US$1.15 billion or the RM4 billion,” The Edge reported.

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