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‘National embarrassment’: Malaysian ex-PM loses appeal over role in $6.3 billion corruption scandal

By Chris Barrett
Updated

Putrajaya, Malaysia: For more than an hour, Najib Razak stared blankly at the screen in front of him. On occasion, he broke from his gaze to scribble down a few notes. But as he digested the scathing judgment, there was little of a positive nature for him to document.

It was only the first of the former Malaysian leader’s five trials over the plundering of the state investment fund he set up in 2009 and oversaw while prime minister.

In what has become one of the world’s most notorious financial frauds, as much as $US4.5 billion ($6.3 billion) was looted from state coffers, according to the US Department of Justice, with $US731 million allegedly making its way into a Najib bank account.

Najib Razak, Malaysia's former prime minister, set up the 1MDB sovereign fund.

Najib Razak, Malaysia's former prime minister, set up the 1MDB sovereign fund.Credit: Bloomberg

Appearing in court by Zoom from his home, Najib on Wednesday failed in his appeal to overturn a 12-year jail sentence for his role in the multibillion-dollar 1Malaysia Development Berhad corruption scandal.

In a unanimous decision by a three-judge panel, the country’s Court of Appeal upheld convictions against the 68-year-old on seven charges of criminal breach of trust, money laundering and abuse of power relating to the misappropriation of 42 million ringgits ($14 million) from SRC International, a subsidiary of Malaysia’s 1MDB sovereign wealth fund.

“This has not been done in the national interest,” said lead judge Abdul Karim Abdul Jalil of the transfer of the money into Najib’s bank account.

“There is no national interest here. It is a national embarrassment.”

Najib and his legal team weren’t physically at court because one of the defence lawyers had tested positive for COVID-19. On an online press conference afterwards he said he had never directed funds to be sent to his bank account.

“I would like to say that I am very disappointed with the judgment delivered by the Court of Appeal this morning,” Najib said.

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“I would like to reiterate that I did not know nor did I ask for it to be transferred to my personal account.”

Speaking outside the court in the country’s administrative and judicial capital Putrajaya, south of Kuala Lumpur, prosecutor V Sithambaram said “the facts speak for themselves”.

“Two courts … four judges … have found that the evidence presented against Najib is justified,” he said.

Former Malaysia prime minister Najib Razak, centre, speaks to journalist before leaving the Kuala Lumpur High Court complex in Kuala Lumpur after his sentencing last year.

Former Malaysia prime minister Najib Razak, centre, speaks to journalist before leaving the Kuala Lumpur High Court complex in Kuala Lumpur after his sentencing last year.Credit: EPA

An MP on bail

Despite the outcome, Najib isn’t being hauled off to prison. Nor has he been ordered to pay the fine of 210 million ringgits that accompanied his custodial sentence handed down in July 2020.

He has been out on 2 million ringgit bail since being found guilty last year and will remain free while he launches another appeal to Malaysia’s highest court, the Federal Court, after being granted another stay of execution.

He will also be able to continue as a member of Parliament and a key figure in the ruling United Malays National Organisation party, which has resumed the political reins in Malaysia, having being removed by voters over the 1MDB affair after six decades in charge in 2018.

“He will not lose his [parliamentary] seat until all appeals are exhausted. But until the conviction [is] set aside, he can’t contest in any elections,” said Malaysian lawyer Lim Wei Jiet.

Professor James Chin, an expert on Malaysian politics at the University of Tasmania, believes there will be surprise and anger among many ordinary Malaysians that Najib is “still walking around” and can continue to be an MP.

He retains a powerful political presence, having last month fronted a campaign for a key state election in Malacca in which the UMNO-led coalition won 75 per cent of the seats, thrashing Anwar Ibrahim’s opposition bloc.

The landslide result fuelled speculation that Najib could seek to mount a return as prime minister should he win his appeal and beat the 35 other charges he is facing in upcoming trials.

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The verdict on Wednesday appears to strike a hammer blow to those ambitions, although Najib retains immense popularity, including by far the greatest social media outreach of any Malay politician.

“Politically, the best way to see today’s result is Najib’s star was on the way up yesterday. Today his star has been stopped dead in its tracks. But this does not mean that he can’t make a comeback,” Chin said.

“Najib is still the thought leader inside UMNO. I don’t doubt that as long as he is not sitting in jail, he will remain the key political player.”

Link to ‘Hollywood’

Najib’s wife Rosmah Mansor is also on trial after hundreds of designer handbags, jewellery and other luxury items were seized by Malaysian police in a raid on their house soon after his election defeat.

Rosmah Mansor arrives at court in Kuala Lumpur in February.

Rosmah Mansor arrives at court in Kuala Lumpur in February.Credit: EPA

The alleged mastermind of the scandal, Malaysian financier Jho Low, has reportedly been living in Macau to avoid facing charges in Malaysia and the US, although his exact whereabouts are unknown.

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He was alleged to have led the spending spree from the cash stolen from 1MDB, splurging it on high-end properties in New York, Los Angeles in London, a 91-metre superyacht and a private jet, and to finance an ostentatious lifestyle in which he rubbed shoulders with Hollywood celebrities and funded movies such as Martin Scorsese’s The Wolf of Wall Street, which was produced by Najib’s stepson Riza Aziz.

When the mass fraud came to light, Leonardo DiCaprio, the lead actor in that film, returned to US

authorities gifts he received from Jho Low including a $US3.2 million Picasso painting.

In 2017, Australian model Miranda Kerr also handed back $US8.1 million in jewellery gifted to her by the now fugitive businessman.

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Original URL: https://www.theage.com.au/link/follow-20170101-p59frl