Justice Ahmad Fairuz Zainol Abidin found Najib liable for US$1.18 billion in losses suffered by the company and an additional US$120 million in quantified damages after ruling he had orchestrated the misappropriation of funds into his personal bank account.
The court said costs will be determined at a later date.
Ahmad Fairuz, however, suspended the judgment for 14 days to allow Najib to file a formal application for a stay of execution pending an appeal.
The judge also noted that a judgment in default had been entered against the second defendant, the company’s former CEO Nik Faisal Ariff Kamil, who remains at large.
In his broad grounds of judgment, Fairuz held that Najib was a shadow director of the company, exercising extensive control over SRC International’s affairs and directing key decisions on loans, fund transfers and investments without proper oversight or due diligence.
The judge also held that Najib deliberately circumvented safeguards, including statutory and institutional controls, to expedite the disbursement of funds to offshore entities.
Fairuz added that Najib had engaged in systematic concealment, withholding material information from the Cabinet and other oversight bodies, including the receipt of US$120 million into his personal account.
“A public officer exercising his powers honestly and within authority has no reason to conceal material facts from such bodies.”
The court held that such conduct indicated that Najib knew he was abusing his public power or was recklessly indifferent to the limits of his authority.
‘Najib acted in bad faith’
The judge said Najib’s failure to supervise the utilisation of a RM4 billion loan from the Retirement Fund Inc (KWAP), recover misappropriated monies, or initiate investigations reinforced the finding of bad faith.
“He prevented investigations that could help identify wrongdoers and recover assets. He protected himself, at the company’s expense, by orchestrating the fraud.
“An honest public officer concerned for SRC International’s welfare would have sought recovery of the misappropriated funds,” he said.
The court also dismissed the claims against the company’s former directors as third parties with costs.
It rejected Najib’s contention that the firm’s losses were caused by the negligence of its directors, holding that any such failures did not break the chain of causation.
It also dismissed his argument that SRC International’s discontinuance of claims against its former directors amounted to a compromise barring the present action.
The suit originally included former company chairman Ismee Ismail, as well as former directors Suboh Yasin, Shahrol Azral Ibrahim Halmi, Azhar Osman Khairuddin and Che Abdullah @ Rashidi Che Omar, as co-defendants.
SRC International later dropped the case against them but Najib subsequently added them as third parties.
Counsel Lim Chee Wee led the legal team for SRC International while Shafee Abdullah and Farhan Shafee represented Najib.