Malaysian Court Upholds 1MDB Verdict Against Former PM

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Malaysian Court Upholds 1MDB Verdict Against Former PM

In handing down the decision, an appeal judge described Najib Razak’s actions as a “national embarrassment.”

Malaysian Court Upholds 1MDB Verdict Against Former PM

Former Malaysian Prime Minister Najib Razak, center, leaves a court house in Kuala Lumpur, Malaysia on July 28, 2020.

Credit: AP Photo/Vincent Thian, File

A Malaysian appeals court this morning upheld former Prime Minister Najib Razak’s guilty verdict in one of the cases linked to the gargantuan corruption scandal at the 1MDB sovereign wealth fund.

In July, Najib was sentenced to 12 years in prison and fined $50 million after being found guilty on seven charges including criminal breach of trust, abuse of power, and money laundering. The charges related to Najib’s illegal receipt of 42 million ringgit ($9.88 million) from SRC International, a former unit of 1MDB.

“This has not been done in the national interest,” Court of Appeal judge Abdul Karim said as he read out the unanimous decision of the three member panel. “There is no national interest here. It is a national embarrassment.” He added, “We dismiss the appeal on all seven charges and affirm the conviction on all seven charges.”

Najib claimed that the money was a no-strings-attached donation from Saudi Arabia’s King Abdullah Al-Saud, who conveniently died in 2015. But Judge Abdul Karim dismissed the story as “a concoction” and said that the money’s provenance in SRC had been “fully established,” according to Bloomberg. “We are in full agreement that Najib knew that funds entering his personal accounts are proceeds from unlawful activities,” he said.

The 1MDB – or 1Malaysia Development Berhad – was established by Najib’s government in 2009 and quickly became the subject of what journalists Tom Wright and Bradley Hope have described as one of “the greatest financial heists in history.” U.S. and Malaysian investigators would later estimate that around $4.5 billion was siphoned from 1MDB between 2009 and 2014 by high-level officials of the fund and their associates. Malaysian authorities claim that at least $4.3 billion more is unaccounted for.

The scandal also contributed to Najib’s resounding defeat at the general election of 2018, after the Wall Street Journal reported that his bank account had received $681 million originating from the 1MDB fund. While Najib used his power as prime minister to stymie investigations into the fund, corruption probes were restarted by Mahathir Mohamad, his former mentor, who toppled Najib at the 2018 polls. Meanwhile, the alleged mastermind of the theft, Penang financier Low Taek Jho, or Jho Low, remains on the lam and beyond the reach of Malaysian (or any) justice.

Today’s appeal concerned just one among dozens of other cases in connection with 1MDB and SRC; Najib faces another 35 charges related to the affair, a testament to the immense scale of the theft.

While the verdict reflects well on the integrity and independence of Malaysia’s judiciary, Najib remains far from seeing the inside of a prison cell. Najib’s lawyer Shafee Abdullah told the court today that her client would appeal the verdict at the apex Federal Court, a process that could take many months to play out, and will likely see Najib free to campaign in the next general election, which is due to be held on or before July 2023, but will likely be called next year.

In the meantime, the judge allowed Najib’s request for a stay on the sentence and allowed him to go free on bail, ensuring him the time and space to strategize. Najib, who claims that the 1MDB charges are politically motivated, still holds his seat in parliament and remains an influential figure within his party, the United Malays National Organisation (UMNO), which returned to power in August under Prime Minister Ismail Sabri Yaakob.

Indeed, Najib was the political face of UMNO at last month’s state election in Melaka, in which Barisan Nasional, a UMNO-led coalition, won a resounding victory, capturing 21 of 28 seats in the state legislature. The overwhelming result prompted speculation that Najib would run for re-election to parliament, and even seek to mount a return as prime minister, should he win his appeal against the 1MDB convictions.

Given how he used the powers of his office to block investigations of 1MDB prior to 2018, UMNO’s critics have expressed well-grounded fears that Najib could secure leniency under an UMNO government, to say nothing of his possible return as prime minister.

Today’s verdict clearly complicates Najib’s plans. Malaysia’s constitution bars him from contesting elections unless he gets a pardon or a reprieve from the country’s king. But in a September interview with Reuters, Najib challenged his disqualification, saying that it was “subject to interpretation.”

“It depends on interpretation in terms of the law, the constitution, and whatever happens in court proceedings,” he said.

Given the sheer number and weight of the 1MDB-related charges still facing him, it is likely that Najib sees his main chance of exoneration as regaining the political clout that will allow him to grind the proceedings to a halt. Three years after an election in which 1MDB played a key role in Najib’s defeat, the scandal is likely to again feature prominently when Malaysians next go to the polls.