KUALA LUMPUR - SRC International Sdn Bhd has objected to Datuk Seri Najib Razak's application for a stay of execution of the High Court ruling, which found the former prime minister liable for SRC's USD1.3 billion in losses, pending his appeal to the Court of Appeal.
SRC counsel P. Gananathan submitted that everyone is equal before the law, and that Najib's personal position or role does not alter the legal inquiry.
He further argued that the former prime minister's contention that the risk of reputational harm and enforcement of the judgment would affect his personal integrity as a longstanding public figure is entirely irrelevant.
"Najib's prominence as a public figure does not afford him any greater entitlement to a stay than any judgment debtor, nor does it convert an ordinary consequence of judgment into a special circumstance," he said.
He was making submissions during the hearing of the stay application via videoconferencing today, in SRC's USD1.18 billion civil suit against Najib and former SRC International chief executive officer Nik Faisal Ariff Kamil, who remains at large.
Gananathan further submitted that while the monetary judgment granted in favour of SRC is substantial, this fact alone is insufficient to warrant the court's intervention on the ground that the appeal would otherwise be rendered nugatory.
"Otherwise, every time a court makes a substantial monetary judgment, defendants would be entitled to automatically stay the execution of the judgment. This would be inconsistent with the general rule that an appeal does not operate as a stay of execution under Section 73 of the Court of Judicature Act,” he said.
Gananathan also rebutted Najib's argument that SRC, which was wound up on Jan 19 this year and is currently under liquidation, would be unlikely to repay any substantial sum should his appeal succeed.
He described that contention as speculative and unrealistic, noting that the winding-up order dated Jan 19 directs that all monies received by the liquidator be paid into the SRC Group Trust account.
"As such, any sums recovered in execution of the judgment herein will ultimately be held and administered by the Ministry of Finance Inc, effectively be held by the government for the benefit of the plaintiff.
"The liquidator, under his duties of recovery and powers vested upon him in liquidation under the Companies Act, will be subject to the same restitutionary obligations.
"Only that the liquidator, as an officer of the court and therefore answerable to the court, would be under a duty to ensure that the monies held in trust are restituted in the event of a successful appeal," he said.
Earlier, Najib's counsel, Muhammad Farhan Muhammad Shafee, submitted that SRC has been formally wound up and is now under the control of the liquidators.
He argued that it would be difficult for the company to return the judgment sum to Najib should his appeal succeed.
"Should Datuk Seri Najib be compelled to satisfy this multi-billion Ringgit judgment now, those funds would immediately be pulled into the "solvent" of a winding-up process, to be distributed among various creditors and administrative costs.
"This creates a real and present danger that, even upon a successful appeal, SRC would be structurally incapable of providing restitution.
"One of the instances that constitute special circumstances on which the court might grant a stay of execution is that in a case where there is evidence to show that SRC was insolvent and it would not be in a position to reimburse the award and to pay damages if Datuk Seri Najib were to succeed in the appeal," he contended.
After hearing submissions from both parties, Justice Datuk Ahmad Fairuz Zainol Abidin (now a Court of Appeal judge) set May 13 to deliver his decision on the stay application.
On March 31, the High Court ruled that Najib is liable for SRC's USD1.3 billion losses after finding that he had breached his fiduciary duties, abused his position and misappropriated the company’s funds for personal gain.
Najib was ordered to pay the amount, in addition to USD120 million that he had received from the company into his AmPrivate banking account ending 964, hence bringing the total to USD1.3 billion.
SRC initiated the suit in May 2021, alleging that Najib had breached his fiduciary duties, abused power, and misappropriated company funds for personal gain, naming him and former directors, Datuk Suboh Md Yassin, Mohammed Azhar Osman Khairuddin, Datuk Che Abdullah @ Rashidi Che Omar, Datuk Shahrol Azral Ibrahim Halmi, Tan Sri Ismee Ismail, and SRC's former chief executive officer, Nik Faisal Ariff Kamil, who remains at large, as defendants.
Subsequently, SRC removed six original defendants from the suit, retaining only Najib and Nik Faisal as the first and second defendants. In 2021, a default judgment was entered against Nik Faisal, leaving Najib as the sole remaining defendant. Najib later named the former SRC directors as third-party respondents.
SRC seeks, among other reliefs, a declaration of Najib's liability and compensation for the USD1.18 billion in losses sustained from his alleged breach of fiduciary duties and trust, as well as quantified damages of USD120 million from Najib and USD2 million from Nik Faisal for fraudulent breach of fiduciary duties and trust. - BERNAMA