(Apr 3): The first of many trials for Malaysia’s former premier Najib Razak will serve as a key test of the nation’s readiness to get to the bottom of the 1MDB scandal.
Najib is set to appear in court on Wednesday to face seven of 42 corruption and money-laundering charges linked to his role in 1MDB, the state fund at the centre of a global heist that allegedly saw US$4.5 billion ($6.1 billion) embezzled. He has denied any wrongdoing.
Recouping the lost funds and bringing those responsible to justice were at the top of Prime Minister Mahathir Mohamad’s list of promises when he assumed office last May. Malaysian prosecutors have since slapped dozens of charges on former 1MDB officers, fugitive financier Low Taek Jho and units of Goldman Sachs Group Inc. But nearly a year later, only Najib is ready to proceed to trial.
The seven charges to be adjudicated on Wednesday refer to 42 million ringgit ($13.9 million) of funds that Najib allegedly received in his personal accounts from SRC International Sdn, a former unit of 1MDB. The relevant fund transfers were done onshore, making it simpler for Malaysian investigators to trace compared with the globe-spanning transactions that led to the other charges.
The proceedings have been beset by troubles, including multiple delays, suspects who remain at large and issues with serving charges against Goldman’s units.
Lengthy Delays
The complications may worsen as authorities bring to court the remaining 1MDB cases, which involve an ever more complex group of transactions spanning multiple legal jurisdictions from Singapore to Switzerland. Malaysia’s police have yet to track down suspects who were charged in their absence, including Jho Low, the businessman that the US painted as the mastermind of the scandal.
Prosecutors has yet to serve summons against two of the three Goldman Sachs units it charged in December. The New York-based bank is accused of misleading investors when it helped 1MDB raise US$6.5 billion through bond sales, while allegedly knowing that the funds would be misappropriated. Only the US firm’s Singapore unit was a respondent at a hearing in Kuala Lumpur last month, prompting the court to set a new pretrial hearing in June. Goldman says it will vigorously defend against the charges.
Najib’s lawyers have managed to secure delays to the trial, which was scheduled within 90 days of the charges being served in July. Initially set to kick off on February 12, it was stalled due to an appeal his legal team filed over procedural issues. That appeal was eventually dismissed, but not without further delays caused by, among other things, a pet dog injuring his lawyer’s wrist.
List of charges in the order they were laid against Najib
- The upcoming trial will focus on allegations linked to his oversight of funds held by 1MDB’s former unit SRC International Sdn Bhd. He faces one charge of receiving RM42 million (US$10.3 million) of bribes and three counts of criminal breach of trust. He was subsequently charged with three more counts of related money-laundering charges.
- Najib was slapped with 21 counts of receiving, using or sending illicit funds as well as four counts of corruption involving US$681 million that appeared in his personal bank accounts. The charges were linked to his alleged role in 1MDB deals, including a US$2 billion joint venture with PetroSaudi International Ltd, a RM10.6 billion bid for Tanjong Energy Holdings Sdn Bhd and RM2.1 billion of funds from Tanore Finance Corp’s account at Falcon Private Bank in Singapore.
- He was jointly charged with then-Treasury Secretary-General Tan Sri Irwan Serigar related to RM6.6 billion of government payments to an Abu Dhabi sovereign wealth fund as well as monies linked to rail and pipeline projects that involve Chinese companies. Najib faces six counts of criminal breach of trust for his alleged role.
- Najib faces one count of corruption for allegedly tampering with a state audit report into 1MDB, with former 1MDB President Arul Kanda being accused of abetting him.
- He allegedly received a total of RM47 million of proceeds from illegal activities, resulting in three money laundering charges.
The tally amounts to five counts of corruption and nine counts of criminal breach of trust, which carry punishments of up to 20 years and a fine if he’s found guilty. Najib also faces 28 counts of money-laundering charges, some of which carry up to five years jail time and others up to 15 years, as well as fines.
