Zahid – who was then the home minister, under whose jurisdiction the police force falls – said the payment was part of its “welfare activity”.
Zahid said he came to know from his son-in-law (Zul Hisham Zainal) that 45 police football association players and staff had not been paid their salaries and allowances for four months.
This, he said, made it difficult for them to pay house rents, car loans and to support their family members.
“According to two prosecution witnesses, they would have been severely affected if the outstanding amount was not settled,” Zahid said in his witness statement.
Zahid, 69, is standing trial on 12 CBT, eight corruption and 27 money laundering charges amounting to millions of ringgit.
The chairman of Yayasan Akalbudi said the advance was in line with the setting up of the foundation to provide welfare aid to the poor and needy.
“Nabil Salleh and Khairuddin Tarmizi (the trustees of Yayasan Akalbudi) were aware of this and both did not object to the advance,” he said.
Zahid, who is a former deputy prime minister, said the National Sports Council later reimbursed RM1 million to the legal firm of Messrs Lewis & Co which was managing the funds.
The Bagan Datuk MP also said Yayasan Akalbudi did not incur any “wrongful loss” by providing a RM10 million loan to Armada Holdings Sdn Bhd, the company that participated in a tender exercise to supply coal in Indonesia.
He said the company did not win the tender and the money was a sort of investment.
“The company paid Yayasan Akalbudi interest amounting to RM69,722.65, which is a return on investment,” he said, adding that the profit was used to carry out charitable activities.
The transactions involving the police football association and the company are two of the 12 charges of CBT that the Umno president faces.
“I categorically deny that there was dishonest misappropriation of funds in both these cases,” said Zahid, who is now giving evidence to rebut the prosecution’s case
The trial before judge Collin Lawrence Sequerah continues.