KUALA LUMPUR (June 19): A witness from the Ministry of Finance (MoF) told the High Court here today that for the first time ever, the ministry had to prepare materials on a company to be included in a Cabinet memorandum concerning its application for a government guarantee.

Ministry of Finance (MoF) strategic investment division deputy secretary Afidah Azwa Abdul Aziz testified that these materials are usually prepared by the company and submitted to the ministry for preparation of Cabinet meeting papers.

Usually, the ministry would not need to seek information from the company applying for the loan, added the 44-year-old.

The 41st prosecution witness in the trial of ex-prime minister Datuk Seri Najib Razak — where he faces charges of abuse of power, criminal breach of trust and money laundering involving RM42 million of the former 1Malaysia Development Bhd (1MDB) unit’s funds — said the incident happened when the company was seeking its first loan of RM2 billion from Retirement Fund (Incorporated) (KWAP) and a government guarantee to strengthen its loan application in 2011.

Replying to questions from Deputy Public Prosecutor Datuk Suhaimi Ibrahim, she said for any application of a government guarantee, her division will call on the company for an explanation of the loan purpose, background of the project or investment, and its cash flow.

“However, with SRC's application, the company was not called by MoF to give further information, as the company itself came to the ministry to discuss its ‘immediate’ need for the government guarantee. I remember [that] SRC came to MoF on Aug 15, 2011.

“On that day, I was called by my superior Maliami Hamad, who is the division secretary, to meet SRC managing director Nik Faisal Ariff Kamil and Zahid Taib, and two other persons whom I cannot remember.

“In the meeting, I was asked to prepare an internal memorandum and a memorandum for the Cabinet meeting paper immediately, for it to be tabled in the Cabinet.

“I prepared the memo from the Treasury Secretary General [Tan Sri Wan Abdul Aziz Wan Abdullah] to Minister in the Prime Minister's Department [Economic Planning Unit] Tan Sri Nor Mohamed Yakcop, for the Cabinet’s consideration to give a government guarantee to SRC for its RM2 billion loan,” she said while identifying the memo she prepared.

After preparing the memorandum on Aug 15, she said it was brought to the Treasury Secretary-General for approval, before it was brought to Nor's attention for it to be brought to the Cabinet for consideration of the RM2 billion first loan guarantee.

“Normally, memos from MoF related to [the] Cabinet meeting would be brought to the second finance minister. However, in this case, the Treasury Secretary-General asked me to prepare the memo for the Cabinet meeting to be sent directly to Nor instead,” she said.

To hasten preparation for the Cabinet meeting, Afidah said all information related to SRC was obtained from the company representatives who were present in MoF itself on that day.

“This is not a normal practice by MoF, as normally, the company applying would give the information that is needed by MoF for the Cabinet meeting. However, as we were chasing for time, I had to rely on information given by the SRC representatives.

“The Cabinet meeting paper was prepared and submitted to the Cabinet division of the Prime Minister's Department that afternoon, so that the paper could be distributed at the Cabinet meeting on August 17, 2011.

“To my knowledge, the paper was tabled and approved by the Cabinet in its meeting dated August 17, 2011, as stipulated in the minutes of the meeting,” she said, while replying to Suhaimi.

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