by RaHIMI YUNUS / pic by HUSSEIN SHAHARUDDIN

A WITNESS at former Prime Minister Datuk Seri Mohd Najib Razak’s SRC International Sdn Bhd trial testied that he tried to derail a RM2 billion loan request made to the Retirement Fund Inc (KWAP) by jacking up the interest rate.

Amirul Imran Ahmat (picture), who previously worked at the pension fund, said he had proposed a 4.6% interest rate, higher than the typical level set by Khazanah Nasional Bhd and Malaysian Government Securities.

The rate was for an additional RM2 billion facility requested by the former 1Malaysia Development Bhd’s (1MDB) subsidiary after KWAP granted a RM2 billion loan a year earlier.

Despite his effort, the additional RM2 billion credit facility was agreed by both parties as the loan would be backed by government guarantees.

“Why did you propose a higher interest rate?” defence counsel Harvinderjit Singh asked.

“We are hoping to push them out (from the loan application),” Amirul Imran said on the 14th day of the trial.

“You hope they will say no?” Harvinderjit further asked, and Amirul Imran replied: “Yes.”

Amirul Imran said SRC’s presentation looked good on paper, but it was a superficial pitch.

The 29th prosecution witness also testified that former SRC CEO Nik Faisal Ariff Kamil and former 1MDB director Terence Geh tried to avoid talking about SRC’s investments during meetings with KWAP’s investment board.

SRC had requested for a second series of RM2 billion loan in 2012 from the pension fund after RM2 billion was granted in 2011.

The government-owned KWAP has been one of the key lenders to SRC, which the latter allegedly funnelled the proceeds to people of interest and co-conspirators.

Amirul Imran has been a key witness in the trial which the prosecutors aim to prove that Najib is involved in money laundering, criminal breach of trust and abuse of power.

He has divulged how the RM4 billion loans — the biggest given by KWAP — to SRC were rushed through various ranks for approval in violation of the pension fund’s investment policies and guidelines, and with a two-page loan letter absent of details.

On March 20, 2012, the pension fund approved the investment panel paper previously prepared by Amirul Imran, with the same conditions applied in the first RM2 billion loan, which were to have a government guarantee, payout via a progress payment and reviews on all the government-guaranteed loan limitations to avoid “overconcentration” on loans to SRC.

Amirul Imran said the promised government guarantee was the “only selling point” of the investment and set to mitigate any risk to payments of the loan.

However, on March 22, 2012, Amirul Imran said he was instructed by his superior to prepare an investment panel circular paper for the approval of the committee to change the mode of disbursement from progress payment to one lump sum, following a discussion between Najib, former KWAP chairman Tan Sri Dr Wan Abdul Aziz Wan Abdullah, former Treasury secretary general Tan Sri Dr Mohd Irwan Serigar Abdullah and former KWAP CEO Datuk Azian Mohd Nor.

Amirul Imran said he received a copy of an email correspondence, which was sent by Nik Faisal to Azian, stating that SRC was working with major sovereign fund strategic partners towards a potential short-term initial public offering (IPO) “ETT” valued at US$200 million (RM831 million) and a potential medium-term IPO “Electrum”.

He said Nik Faisal mentioned the potential IPO in order to justify that the RM2 billion loan be bullet drawn instead of through a progress payment.