Judicial commissioner recuses herself from hearing 1MDB, SRC lawsuits

KUALA LUMPUR: High Court Judicial Commissioner (JC) Liza Chan Sow Keng has recused herself from presiding the 1Malaysia Development Bhd's (1MDB) lawsuit against a law firm and the SRC International Sdn Bhd's lawsuit against Datuk Seri Najib Tun Razak and six others.

When contacted, a counsel from Rosli Dahlan Saravana Partnership, who acted for 1MDB and SRC, said JC Chan had, during court proceedings via video conferencing today, informed all parties that she had decided to recuse herself from the cases as the former premier is a friend of hers.

"Although they have not been in contact for many years, she is of the view that she should recuse herself from this case to avoid any suspicion or accusation of bias or partiality. So, the matter was sent back for case management before a different court and a new date will be fixed soon," the counsel said.

On May 7, SRC, under its new management, filed a lawsuit against the former prime minister and six others for an alleged breach of trust and breach of statutory duty in relation to the RM4 billion Kumpulan Wang Persaraan Diperbadankan (KWAP) loan to SRC.

In the writ of summons, SRC, which is a subsidiary of 1MDB, named Najib and six former SRC directors, namely Datuk Suboh Md Yassin, Nik Faisal Ariff Kamil, Datuk Mohammed Azhar Osman Khairuddin, Shahrol Azral Ibrahim Halmi, Tan Sri Ismee Ismail and Datuk Che Abdullah@Rashidi Che Omar as the first to seventh defendants. Najib was the Advisor Emeritus of SRC from May 1, 2012, to March 4, 2019.

SRC, which is now wholly owned by the Ministry of Finance Incorporated (MoF Inc), alleged that all the defendants conspired and committed a breach of trust besides claiming that Najib had abused his power and obtained personal benefits from SRC funds as well as misappropriated the funds.

The company is seeking a declaration that all the defendants are liable to pay the loss of investment funds as a result of the use of the loan amount in addition to claiming general damages, exemplary, additional and interest, costs and other appropriate relief provided by the court.

SRC, in its writ of summons, said that in January 2019, the company was placed under the care of officials from the Ministry of Finance (new management) and, after scrutinising and reviewing SRC records, found that SRC's previous directors had not taken any reasonable steps to ensure KWAP's loans amounting to RM4 billion to SRC in 2011 and 2012 were used properly to finance the company's general investment activities and general working capital requirements.

The company claimed that the previous directors did not monitor the disposal of RM3.6 billion to SRC BVI (proposed investment fund) allegedly for SRC to undertake investment activities in the energy resource sector overseas and failed to monitor the Malaysian government's exposure to guarantees given to SRC as well as failed to inquire about the misappropriation of SRC funds.

It also claimed that the new management also found that a large number of withdrawals, transfers and use of KWAP loans were fraudulent or wrong.

1MDB claimed that the two defendants jointly and severally violated their statutory duties to the company on behalf of Najib and businessman Low Taek Jho or Jho Low and their associates, causing the company to suffer losses amounting to US$1 billion.

It is seeking US$1 billion in damages and RM664,821.21 as payment of legal fees.

-- BERNAMA