Ex-Malaysian PM Najib Convicted on All Charges in First 1MDB Corruption Case

Updated at 3:41 p.m. ET on 2020-07-29

A Malaysian court on Tuesday sentenced ex-Prime Minister Najib Razak to 12 years in prison after convicting him on all seven charges tied to the looting of billions of dollars from state fund 1MDB that led to his government’s ouster two years ago.

In the first ever conviction of a former head of government in Malaysia, 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, a subsidiary of sovereign wealth fund 1Malaysia Development Berhad.

Judge Nazlan Ghazali of the Kuala Lumpur High Court also fined Najib 210 million ringgit ($49.3 million) at the end of the case, the first of several trials he would face over the scandal, which former U.S. attorney-general Jeff Sessions had described as “kleptocracy at its worst.”

He would have to serve an additional five years if he fails to pay the hefty fine.

“After considering all [the] evidence in this trial, I find that the prosecution has successfully proven its case beyond a reasonable doubt … I therefore find the accused guilty and convict the accused on all seven charges,” the judge said at the end of the verdict, which took him about 90 minutes to read out.

Nazlan allowed a stay of the prison sentence and fine pending Najib’s planned appeal but he raised the bail amount by 1 million ringgit ($235,200), which must be posted by Wednesday, and ordered him to report to the police twice a month.

More than $4.5 billion was diverted from 1MDB through fraudulent shell companies to corrupt officials and their associates, according to the U.S. Justice Department.

Najib had established 1MDB in 2009 when he was prime minister and finance minister, saying it would benefit the Malaysian people.

But prosecutors had told court that the fund was misused, including to buy a pink diamond necklace for Najib’s wife, to finance his election campaign, to buy high-end real estate in New York and California, and even fund “The Wolf of Wall Street,” a popular Hollywood movie.

But Najib appeared unmoved by the sentence.

“This is definitely not the end of the world, because there’s a process of appeal, and we hope that we would be successful there,” he told reporters after the verdict outside the courthouse, where hundreds of his supporters waited during the court hearing, which lasted the whole day.

He said he hoped his supporters would “continue to believe in me, believe in our struggle, and continue to be in positive and high spirits.”

Moments before the judge sentenced Najib, the 67-year-old former leader told the court to consider what he claimed to be his accomplishments while he was in power and questioned the evidence placed before the court over the charges he faced.

“[L]et me say it again … I did not demand the 42 million [ringgit], I did not plan for the 42 million, nor was the 42 million offered to me, and there has been no evidence to say so.”

When Najib arrived at the courthouse for the verdict scheduled for 10 a.m. (local time), hundreds of his supporters, clad in partisan red or blue shirts, were waiting for him in the nearby streets.

Some of his supporters prayed for Najib, who was wearing a face mask to guard against the coronavirus and was dressed in a tan suit, white shirt and orange-and-blue tie, as he entered the court building.

Historic ruling

Najib’s conviction Tuesday “reinforces the belief of many Malaysians that there was abuse of power and corruption at the highest echelons of power,” Lim Wei Jiet, a legal expert and secretary general of the National Human Rights Society (HAKAM), told BenarNews.

“It is also a historic day for Malaysia whereby a former Prime Minister was convicted for the first time in our history,” he said.

The allegations of massive corruption connected to 1MDB led to Najib’s downfall as prime minister when his United Malays National Organization (UMNO) party, which had dominated Malaysian politics for 61 years, was swept out of office in the May 2018 general election.

The Pakatan Harapan (Alliance of Hope) government, which came to power then, moved quickly to charge Najib and others within his inner circle as part of criminal investigations into the 1MDB scandal.

“The [court] decision is a big win for the people of Malaysia,” a statement from Pakatan Harapan said. “The judicial process will never happen if the people did not rise up and give Pakatan Harapan a win [in the polls].”

The Pakatan alliance, which was elected on a campaign pledge to rid government of corruption, collapsed at the end of February 2020. A new unelected government anchored by UMNO has since taken over and is led by Muhyiddin Yassin, who quit that party after being sacked as Najib’s deputy prime minister in 2015, when Muhyiddin publically raised concerns about the 1MDB affair.

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

In an immediate reaction, Muhiyiddin said his government respected the court decision and called on all parties “to continue to trust the legal system and the country’s judicial as independent and neutral body.

“I understand the feelings and sentiments over the court decision. However I would like to stress that the Perikatan Nasional government will always uphold the rule of law,” the prime minister said.

He added that the government also respected Najib’s right to appeal. “Let’s allow the judicial process to ensure that justice will be upheld.”

According to an expert in Malaysian politics, Tuesday’s verdict would have implications for the Perikatan government.

Muhyiddin’s “position as the prime Minister will be strengthened because of his image of wanting to create a high-integrity government,” Mazlan Ali, a senior lecturer at Universiti Tecknologi Malaysia, told BenarNews.

“Even though the [court’s] decision has nothing to do with the prime minister, in general the perception is that Muhyiddin did not interfere in the court process,” he said.

But Muhyiddin's government, which has a razor-thin majority in Parliament, may face some backlash, especially if elections are to be called soon.

Najib, currently an MP and who retains significant political influence, may not be able to contest if snap polls are called, and this may affect UMNO’s support for Muhyiddin, some experts say.

Najib is still standing trial in another court on 25 charges of abuse of power and money laundering connected with 2.3 billion ringgit ($551 million) that went missing from 1MDB. He could also face additional trials on 10 other corruption-related charges tied to the state investment fund.

[S. Mahfuz/BenarNews]

A scandal with global reach

1MDB was the target of money-laundering investigations in at least a half-dozen countries outside Malaysia, including the United States, Singapore and Switzerland.

A central figure in the scandal was Jho Low – a Malaysian financier and fugitive from justice whose real name is Low Taek Jho.

During the SRC trial, 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.

The trial was held over 94 days with 57 witnesses called for the prosecution and 19 taking the stand for the defense.

In their closing argument, prosecutors blamed Najib, in his parallel role as finance minister, of orchestrating the crime, adding that Jho Low had acted on his orders.

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.

In mid-May, Malaysian prosecutors dropped money-laundering charges against Riza Aziz, a Hollywood film producer who is Najib’s stepson, after anti-graft authorities said they had reached a deal to recover more than $100 million (425.8 million ringgit) that was missing from 1MDB. Aziz’s deal is an order of discharge not amounting to an acquittal.

Nisha David in Kuala Lumpur contributed to this report.

CORRECTION: An earlier version incorrectly reported that Najib's wife, Rosmah Mansor, and Ahmad Zahid Hamidi, the president of UMNO, had both been charged in corruption cases related to 1MDB. They both are facing corruption charges in separate cases but not linked to 1MDB.