Najib Razak on 1MDB: I knew nothing of transferred millions

Former Malaysian prime minister Najib Razak has given evidence for the first time over his alleged role in the 1MDB scandal.

Former Malaysian PM Najib Razak walks out from a Kuala Lumpur courtroom on Tuesday. Picture: AP

Former Malaysian prime minister Najib Razak has given evidence for the first time over his alleged role in the multi-billion dollar 1MDB financial scandal that toppled him from office, saying his government “reluctantly” took over the fund from the Terengganu state administration in 2009 to save it from “embarrassment”.

Mr Najib, 66, became the first Malaysian leader to take the stand in his own defence on Tuesday when he entered the High Court in a sky-blue suit and swore on the Koran before reading from a 243-page statement in Malay.

Mr Najib said the fund, originally known as the Terengganu Investment Authority, was set up as a result of discussions between the Terengganu sultan, state government and now-fugitive Malaysian businessman Jho Low, who is alleged to have played a central role in the misappropriation of more than $US4.5bn. “(Low) portrayed himself as someone influential in the Middle East countries who I believed was able to facilitate investments and partnerships between them,” Mr Najib said.

Ultimately, however, his government felt obliged to take over the fund to protect the country’s bond market, he told the court.

Low, whose real name is Low Taek Jho, has been charged in Malaysia and the US over ­alleged theft from the 1MDB sovereign wealth fund, but has denied any wrongdoing.

Mr Najib faces 42 charges and at least two separate trials relating to the plundering of 1MDB which was set up to help promote development in Malaysia but which prosecutors alleged became a slush fund for the ­patrician politician and his cronies. He has pleaded not guilty to all charges.

Tuesday’s case relates to the alleged siphoning of $14.7m into Mr Najib’s bank accounts from SRC International, a subsidiary of 1MDB, for which he faces seven charges of criminal breach of trust, abuse of position and money laundering.

Mr Najib told a packed courtroom on Tuesday he played no role, either as prime minister or finance minister — positions he held concurrently during his decade in office — in setting up SRC International in 2011.

He also denied he was involved in appointing members of the 1MDB management team, and said he saw “nothing extraordinary” in amendments to 1MDB’s articles of association that granted him final approval over the appointment or removal of board directors.

Prosecutors have argued Mr Najib wielded huge influence over SRC International and knew that stolen money was being funnelled from it into his accounts. But in an opening statement, Mr Najib’s lawyer Shafee Abdullah said he would prove his client “did not misappropriate funds ”. The amount transferred to his account “was done without his knowledge or involvement” as the transactions “were being manipulated by third parties without his knowledge and approval”, Mr Shafee said.

Additional reporting: AFP