Malaysian Court Rejects Ex-PM Najib’s Request to Delay 1MDB-Linked Lawsuit

A Malaysian court on Tuesday rejected ex-Prime Minister Najib Razak’s request to postpone proceedings in a billion-dollar lawsuit brought against him by a unit of the beleaguered state fund 1MDB linked to his 2020 conviction on massive corruption charges.

The former PM was seeking a delay in proceedings in the civil case lodged by SRC International, pending a decision on an appeal to quash his criminal conviction.

That decision would not prejudice the U.S. $1.1-billion civil suit, as Najib had claimed, because the defense’s arguments had already been disclosed in the criminal trial, Kuala Lumpur High Court Judge Ahmad Fairuz Zainol Abidin ruled on Tuesday.

“[O]n subtle principle of the law and based on the background of the suit, a stay is not allowed.”

The judge gave Najib 40 days to prepare his case, and set April 1 for the next step in the court proceedings.

Najib’s lawyer, Harvinder Singh, said the legal team was waiting to hear from their client on whether he would appeal Judge Ahmad Fairuz’s decision.

“The judge did not allow Najib Razak’s application for stay of proceedings pending disposal of the SRC related criminal cases,” Singh told BenarNews.

“The judge has also directed for the defense to be filed by March 31, 2022.”

Civil suit filed last May

Several ongoing criminal court hearings against Najib are currently underway, including his final appeal to the Federal Court against his July 2020 criminal conviction, and a 12-year prison sentence and $50.2 million fine.

Back then, Najib was found guilty of one count of abuse of power, three counts of criminal breach of trust, and three counts of money-laundering over allegations that he illegally received 42 million ringgit (U.S. $9.67 million) from SRC International.

The former PM appealed the conviction in the Court of Appeal, which upheld the conviction last December. Subsequently, Najib filed an appeal at the Federal Court, the decision of which is awaited. Najib has not served any jail time to date and is free on bail, pending this decision.

SRC International filed the suit against Najib and six of the company’s former directors on May 7 last year. It later dropped the names of the former directors leaving Najib as the sole defendant in the lawsuit. 

The 1MDB unit alleged that Najib, in his capacity as the firm’s emeritus advisor, had abused his power, obtained personal benefits from SRC International’s funds, and misappropriated the funds. 

SRC also alleged in its 80-page statement of claim in November 2021 that after Najib’s government fell in 2018, detailed investigations on all the transactions at the firm revealed that crucial documents linked to the fraud committed against the company had been destroyed.

In January 2019, SRC was removed from under 1MDB and placed in the care of the Ministry of Finance, where the various fraudulent transfers and embezzlement of money were discovered.

Earlier this month, a Malaysian court froze U.S. $681 million in assets tied to Najib Razak, granting a request by 1MDB.

The Kuala Lumpur High Court granted the injunction after the sovereign fund and some of its units lodged a petition seeking that those assets they are claiming from Najib be blocked from use or sale. The court also granted their request to limit Najib’s monthly withdrawals to 100,000 ringgit (U.S. $23,900).

That order will be in force until a separate lawsuit filed by the fund last year is settled. The suit seeks to recover that amount of money that Najib allegedly embezzled from the fund.

In its suit against the former PM and seven other people, 1MDB claimed that the stolen money was deposited into Najib’s bank account, local media had reported last May. The asset freeze applies only to Najib.

Roger Ng trial

Meanwhile on the other side of the world, a former Goldman Sachs partner who had pleaded guilty to money laundering and bribery related to 1MDB, testified in a New York court last week in the trial of his erstwhile Malaysian colleague Roger Ng, news agencies reported.

Tim Leissner told a federal court that he and a Malaysian colleague had become the bank’s “heroes” for bringing in billions of dollars of business from 1MDB, Reuters reported.

Leissner also said that he and other corrupt executives at Goldman Sachs had built a “house of cards” that was doomed to fall after they attempted to try to conceal a scheme to loot 1MDB, the Associated Press reported.

Prosecutors allege that Ng took $35 million in kickbacks and conspired to launder stolen funds through the U.S. financial system.

But Ng’s defense lawyer said that Ng had no role in the scheme allegedly concocted by Leissner and fugitive Malaysian financier Low Taek Jho, also known as Jho Low.

Malaysian and U.S. prosecutors alleged that at least $4.5 billion was stolen from 1MDB between 2009 and 2014 in a financial scandal that implicated foreign and local financial institutions and high-ranking officials, including Najib.