1MDB Scandal: Malaysian Court Freezes Ex-PM Najib’s Assets, Limits His Withdrawals

A Malaysian court has frozen U.S. $681 million in assets tied to former Prime Minister Najib Razak, granting a request from the very state fund he is accused of having looted.

The Kuala Lumpur High Court granted the injunction Tuesday after the 1MDB sovereign wealth fund and some of its units lodged a petition on the same day seeking that those assets they are claiming from Najib be blocked from use or sale. The court also granted their request to limit Najib’s monthly withdrawals to 100,000 ringgit (U.S. $23,900).

The former PM, or anyone acting on his behalf, “shall not, in any way whatsoever, remove from Malaysia, or dispose of, or operate or reduce the value of any of his assets in Malaysia up to the value of U.S. $681,000,000 pending the final determination or outcome of the action taken by the first plaintiff and the fifth plaintiff,” Judicial Commissioner Atan Mustaffa said in a judgment document seen by BenarNews.

The first plaintiff refers to the fund known as 1Malaysia Development Berhad and the fifth to a unit of 1MDB. The freeze applies to all of Najib’s assets at home and abroad that together are valued at $681 million.

The order will be in force until a lawsuit filed by the fund last year is settled. The suit seeks to recover that amount of money that Najib allegedly embezzled from the fund.

In its suit against the former PM and seven other people, 1MDB claimed that the stolen money was deposited into Najib’s bank account, local media had reported last May. The asset freeze applies only to Najib.

As for monthly withdrawals, Najib is required to obtain permission in writing from 1MDB and its subsidiary to withdraw any amount above 100,000 ringgit, according to the court document.

“If no written permission is given, [Najib] may apply for and obtain permission from the court for an amount exceeding 100,000 ringgit per month allowed to be used for its expenses,” it said.

‘In a bad light’

The former PM will challenge the freeze order, Free Malaysia Today reported, citing a member of Najib’s legal team.

“We will be filing the legal papers tomorrow and our client will mount a strong challenge,” Farhan Muhammad Shafee told the local news outlet.

Malaysian and U.S. prosecutors allege that at least $4.5 billion (18.8 billion ringgit) was stolen from 1MDB, which Najib as PM had established in 2009 to fund development programs in Malaysia. The U.S. Department of Justice (DOJ) has described 1MDB as the “worst kleptocracy scandal in recent times.”

Najib has already been found guilty in one of the several 1MDB-related cases against him.

In July 2020, a Malaysian court convicted the former PM guilty of money laundering, abuse of power, criminal breach of trust and other charges, and sentenced him to 12 years in prison. An appeals court upheld the sentence, which Najib is appealing in Malaysia’s highest court.

Analysts are divided about how this latest ruling will affect the former PM and his chances for a political comeback. He and his party were swept out of power in the 2018 general election under of wave of public outrage over the 1MDB scandal.

Mazlan Ali, a senior lecturer at University Teknologi Malaysia, believes the court order shows Najib “in a bad light” because it gives the impression that he “is involved abuse of power in the 1MDB issue.”

If Najib seeks a role in the March 12 state assembly election in Johor, the opposition will use the court order to target him, Ali told BenarNews.

But Awang Azman Awang Pawi, an analyst at the University Malaya, said the order to freeze Najib’s assets would not affect him much because the case has yet to be decided.

Additionally, targeting the former PM did not work for the opposition during a state election in November, in which Najib had a major campaigning role, Awang Azman noted.

“If you look at the election in Melaka, there were many campaigns to show Najib in a bad light but it did not work and it failed to cause a dent to campaign machinery,” Awang Azman told BenarNews.

“On the contrary, it brought sympathy for Najib.”

Suganya Lingan in Kuala Lumpur contributed to this report.