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Malaysia Drops Charges Against Najib’s Stepson in Laundered 1MDB Millions

Hadi Azmi
Kuala Lumpur
2020-05-14
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Riza Aziz, the stepson of former Malaysian Prime Minister Najib Razak, arrives at the Kuala Lumpur Sessions Court where he agreed to pay back millions in 1MDB funds, May 14, 2020.
Riza Aziz, the stepson of former Malaysian Prime Minister Najib Razak, arrives at the Kuala Lumpur Sessions Court where he agreed to pay back millions in 1MDB funds, May 14, 2020.
S. Mahfuz/BenarNews

Malaysian prosecutors dropped money-laundering charges Thursday against the stepson of ex-Prime Minister Najib Razak, with anti-graft authorities saying they had reached a deal with the defendant to recover more than U.S. $100 million from beleaguered state fund 1MDB.

Riza Aziz, 43, the son of Najib’s wife Rosmah Mansor, appeared at the Kuala Lumpur Sessions Court where he agreed to the settlement, according to the Malaysian Anti-Corruption Commission (MACC).

“The prosecution with the consent of the accused now respectfully moves the court for an order of discharge not amounting to an acquittal,” lead prosecutor Gopal Sri Ram told the Sessions Court, according to a copy of his courtroom statement, which he later shared with reporters.

If Aziz meets the deal’s requirements, steps to obtain full acquittal will be taken, according to the prosecutor.

“But if there is no satisfactory completion of the agreement reached, the prosecution reserves its right to reinstate the charges and to prosecute the accused to the full extent of the law,” Gopal said.

Under the terms of the deal, Aziz would pay back to the government “a substantial sum running into several million ringgit,” the prosecutor told the court. “The sums have direct reference to the subject matter of the charges framed in the case.”

As a result of the agreement with the defendant, “the Malaysian government is expected to recover overseas assets involved in the offense,” MACC said in a statement issued after the hearing. The assets were worth an estimated $107 million (464.8 million ringgit), the commission said.

Former Attorney General Tommy Thomas, whose office brought the charges against Aziz in connection with the theft of billions of dollars from 1Malaysia Development Berhad (1MDB), challenged the commission for saying in its statement that he had agreed to the settlement with the defendant.

“I resigned 2½ months ago and up to that point, there was no agreement to drop charges against Riza. So, it is wholly untrue and a fabrication to say that I had agreed to the decision,” Thomas told The Malaysian Insight. “I am terribly disappointed that the MACC had to make this false statement.”

In July 2019, Thomas’ office charged Riza with five counts of money laundering involving about $248.7 million (1 billion ringgit) from 1MDB. Aziz, who was released on 1 million ringgit ($230,000) bail, pleaded not guilty to the charges that could carry a prison term of up to five years each if he were convicted.

On Thursday, defense attorney Hariharan Tara Singh said his client was ready to move on.

“We are extremely thankful to the Attorney General’s Chambers and the MACC. Mr. Aziz is pleased to make good on his obligations to those authorities and looks forward to beginning the next chapter of his life,” the attorney told BenarNews.

US settlement

In Washington on Thursday, the U.S. Department of Justice (DOJ) declined to comment on the Malaysian settlement.

In 2018, the DOJ announced that Red Granite Pictures, a production company co-founded by Aziz, had agreed to pay the American government $60 million (260.4 million ringgit) to settle a lawsuit alleging that its movies, including “The Wolf of Wall Street,” were made using funds diverted from 1MDB.

Thursday’s deal occurred a week after U.S. justice officials announced that they had reached a settlement to recover more than $49 million (212.6 million ringgit) tied to 1MDB funds from Khadem al Qubaisi, the former managing director of the International Petroleum Investment Co.

That settlement, DOJ said, added to the more than $1 billion (4.3 billion ringgit) in 1MDB assets that the U.S. had recovered or assisted in recovering.

Najib set up 1MDB in 2009 to promote economic development in Malaysia through global partnerships and foreign direct investment. Its funds were intended to be used for improving the well-being of the Malaysian people.

1MDB instead amassed billions in debts. In 2016, the DOJ accused “Malaysian Official 1” – later identified as Najib – and associates of embezzling and laundering more than $4.5 billion (19.5 billion ringgit) in 1MDB-linked money between 2009 and 2014.

Najib, who faces a total of 42 criminal counts, is standing trial on charges linked to abuse of power and laundering money tied to 1MDB and in a second court on charges linked to a 1MDB subsidiary, SRC International. He could face additional trials.

Delayed by the COVID-19 pandemic, Najib’s 1MDB trial is scheduled to resume on May 19 – 188 days since the last hearing. The court is expected to hear testimony from the star witness, Shahrol Azral Ibrahim Halmi, the former 1MDB managing director and chairman. He began testifying on Sept. 23, 2019.

Separately, Najib who is standing trial on seven charges involving the misappropriation of 42 million ringgit ($9.67 million) from 1MDB subsidiary SRC International, is to appear before Justice Nazlan Ghazali on June 1 for the oral submission stage of the trial.

On Nov. 11, 2019, Nazlan ordered Najib to enter his defense after ruling the prosecution had proven a prima facie case.

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