Malaysia’s Najib Awaits Verdict in First 1MDB-linked Trial

Former Malaysian Prime Minister Najib next week will face his day of reckoning in front of the Malaysian people, when a judge will deliver a verdict in the first of two corruption trials linked to the theft of billions of dollars from 1MDB, a state development fund.

Najib, who turned 67 this week, could be sent to prison for decades if convicted at the Kuala Lumpur High Court on Tuesday. He has been charged in the case with three counts of criminal breach of trust, three counts of money laundering, and one count of abuse of power.

The charges stem from allegations that he illegally received 42 million ringgit (U.S. $9.67 million) from SRC International, a subsidiary of 1Malaysia Development Berhad, a fund which Najib created while in office to benefit his countrymen.

Najib has denied all the allegations against him in this case and his ongoing other trial.

“I did not steal money from the people,” Najib said in May 2018, in the wake of his government’s defeat in a general election and days after police seized hundreds of millions of dollars in luxury handbags, watches and other high-priced items – along with suitcases full of cash – during a raid on Kuala Lumpur condominiums linked to his family.

The allegations against him of massive corruption tied to the 1MDB financial scandal, nonetheless, led to his downfall as prime minister when his party was swept out of office in an historic election.

On July 3, 2018, the first day charges were filed against him, Najib accused the government of Mahathir Mohamad – who came to power on a campaign pledge to rid government of corruption in light of the 1MDB affair – of being out to get him. Najib told reporters at the courthouse that it was “what the new government wants.”

“If this is the price I have to pay after 42 years of service to the Malaysian people, I accept it. What I hope is that the judicial process is a process that is truly fair, following the rule of law. I’m confident in my innocence; this is the best chance I have to clear my name,” he said at the time.

Najib, who faces a total of 42 criminal counts, is standing trial in another court on 25 charges of abuse of power and laundering of money connected with 2.3 billion ringgit ($551 million) that went missing from 1MDB. He could also face additional trials on the 10 remaining charges.

Malaysian and U.S. prosecutors allege that $4.5 billion (18.3 billion ringgit) was diverted from 1MDB and SRC to bank accounts held by Najib and others.

On Friday, U.S.-based investment bank Goldman Sachs and the Malaysian government announced a settlement valued at $3.9 billion (16.6 billion ringgit) and resulting in the dismissal of criminal charges against the Wall Street firm over the sale of bonds linked to billions that went missing from 1MDB.

“This settlement by Goldman Sachs represents its acknowledgment of the misconduct of two of its former employees in the broader 1MDB fraudulent and corruption scheme. This settlement will not affect Malaysia’s claims against Jho Low and others parties related to the 1MDB scandal,” a Finance Ministry statement said, referring to a financier whose real name is Low Taek Jho, and is a fugitive from justice.

Politics of the trial

The upcoming verdict has seeped into the fabric of Malaysian politics during the past two years.

Mahathir’s government moved quickly soon after the 2018 election to arrest and charge Najib over the 1MDB scandal.

Posting on his blog on June 25, Mahathir alleged that his successor, Muhyiddin Yassin, replaced him as prime minister after securing the support from Najib’s United Malays National Organization (UMNO) political party by promising to free the ex-leader from any prison sentence.

Muhyiddin had served as a minister in Mahathir’s Pakatan Harapan government and as Najib’s deputy, until he was sacked in 2015 after publically raising his concerns about the 1MDB scandal.

“Far from fulfilling his promise to bring down Najib, Muhyiddin is now doing his best to vindicate Najib from all charges so that he can contest in the next general election,” Mahathir wrote. “By then Najib would no longer need Muhyiddin, because Najib intend to return as prime minister.”

Mahathir spoke out following a statement on May 18, 2020, where Muhyiddin pledged not to meddle with the judiciary.

“The prime minister repeats his stance to not interfere with the affairs of the Attorney General’s Chamber and the judiciary in making any decision regarding criminal cases in the country, including high profile cases,” Muhyiddin said in the statement.

Muhyiddin replaced Mahathir as prime minister in March after forming a new coalition and convincing the king that he had the support of a majority of MPs.

Azmi Hassan, a political analyst at Universiti Kebangsaan Malaysia, said Muhyiddin stood by his word and did not interfere with the trial.

“In fact when he was lobbying for UMNO’s support to his premiership, there was no discussion made and no pressure from UMNO so that Najib was given any privilege in his trials,” Azmi told BenarNews. “This was stressed by Najib himself – that he wanted to clear his name personally through the legal system.”

Najib took to his Facebook page to respond to Mahathir.

“He who is unrelentingly trying to make a comeback as the ninth prime minister, but he accuses me of trying to make a comeback!” Najib said about Mahathir in a post liked by 34,000 of his fans.

Closings

After hearing months of testimony and days of closing arguments from prosecutors and Najib’s defense attorneys, Nazlan Ghazali, the Kuala Lumpur High Court judge presiding over the SRC case, last month said he needed time to decide and set July 28 to announce his verdict.

But in Najib’s other 1MDB trial, the judge in that case has allowed the former prime minister to miss scheduled court dates in order to attend parliament as well as to campaign for a Pahang state assembly by-election earlier this month.

In his closing argument in the SRC trial, Najib lead attorney Shafee Abdullah said the defense faced overwhelming public prejudice.

“Public prejudice is so high that it makes mounting a defense in a case like this very difficult. The 42 million ringgit went into my client’s account: that is the prosecution’s case. The public wants to think this alone is equivalent to a smoking gun,” Shafee said.

The defense team hammered the point that Najib was a victim of manipulation by Jho Low, as well as SRC International’s former managing director, Nik Faisal Ariff Kamil.

In their closing, prosecutors blamed Najib, who held the portfolio of finance minister, for orchestrating the crime, adding Jho Low acted on his orders.

“We say Jho Low is not acting behind the scenes but was acting with the knowledge of the accused. (Najib) himself confirmed that there were some communications, although to be fair to him, it was not a lot,” lead prosecutor V. Sithambaram told the court.

A source close to the prosecution told BenarNews that while the public sees this as a matter of all or nothing, the court could convict Najib on some of the charges and clear him of some of the others.

“From my personal reading, I foresee him getting away with the criminal breach of trust charges and some of the money laundering charges. He will get caught for the abuse of power,” the source without elaborating.

Billions recovered

Jho Low, who faces his own criminal charges in Malaysia related to 1MDB, reached a deal in the U.S. to turn over assets valued at $700 million (2.925 billion ringgit) purchased with 1MDB funds.

Jho Low is not the only person close to Najib who has been caught up in the 1MDB investigation – Najib’s wife, Rosmah Mansor, faces corruption charges as well.

In addition, Malaysian prosecutors dropped money-laundering charges against Riza Aziz, her son and Najib’s stepson, after anti-graft authorities said they had reached a deal to recover more than $100 million (425.8 million ringgit) from 1MDB. Aziz’s deal is an order of discharge not amounting to an acquittal.

Whatever the verdict, Najib already suffered a major loss on Wednesday when the High Court upheld an Inland Revenue Board bid for summary judgment to recover 1.69 billion ringgit ($396 million) in unpaid income taxes.

In January, Shafee told the court that the bid was part of the government’s effort to end his Najib’s political career.

“Once my client is labeled bankrupt, he will be out of the political arena,” Shafee said at the time.

The defense team is going to challenge the decision, Shafee’s son, attorney Farhan Shafee told BenarNews.

“We will be appealing this judgment,” he said.