KUALA LUMPUR: Datuk Seri Najib Razak said it was "quite preposterous" to claim that as then prime minister, he had the power to hire or fire SRC International Sdn Bhd directors, which allegedly allowed him to control them.
The former prime minister dismissed the suggestion of former SRC directors Tan Sri Ismee Ismail and Datuk Suboh Md Yassin in his testimony as the first defendant in SRC International's US$1.18 billion civil suit against him and former chief executive officer (CEO) Nik Faisal Ariff Kamil.
"With respect, it is quite preposterous. The power to hire or remove any director is usually in the hands of the shareholders of a company.
"As I understand corporate governance principles, this does not detract from the directors' statutory and legal duties to act in the best interest of the company.
"As I mentioned, the powers in SRC, as with 1Malaysia Development Bhd, in the hands of the prime minister was something quite normal when dealing with government linked companies. (GLC).
"This does not mean that the GLCs will blindly adhere to what is orally represented to them as being directions of the prime minister or finance minister or any other person.
"I also repeat what I said earlier that the appointing or removal of directors has to be preceded with resolutions of the directors and of the company prior to the approval of the prime minister being sought," he said in his witness statement.
Najib said the board of directors must have known that they were the fiduciaries and the government had entrusted them to decide on matters in the company's best interest.
He said otherwise, why would a board of directors comprise eminent people in the first place.
"With respect, if the board was blindly adhering to the say so of the CEO without verifying the matter with the Finance Ministry or with me personally, this is a clear dereliction of duty.
"I also note that despite all the hullabaloo being made on this power, there isn't any specific instance pointed out where I as the prime minister had 'fired' any one in SRC," he said.
Najib also said he did not have any control over the movement and utilisation of SRC funds, but ratified decisions made by the board, which was expected to conduct the necessary due diligence.
"By reference to the duties and powers accorded to me in SRC, I lack any position or power in the corporate governance structure to undertake any transactions of SRC.
"This is solely within the ambit of the board of directors and I was never informed of, nor was I able to carry out an independent verification of the disbursement of SRC funds," he said.
Najib was the sole shareholder of SRC International and adviser emeritus of the company at the time.
SRC was represented by lawyer Datuk Lim Chee Wee and Muhammad Farhan Muhammad Shafee stood for Najib.
The trial before High Court judge Datuk Ahmad Fairuz Zainol Abidin continues tomorrow.
SRC, under its new management, filed the suit in May 2021, claiming that Najib had committed a breach of trust and power abuse, and personally benefited from the company's funds.
It is also seeking a court declaration that Najib is responsible for the company's losses due to his breach of duties and trust and for Najib to pay back the RM42 million in losses that it has suffered.