1MDB: Malaysian ex-PM appears in court over missing billions

  28 August 2019    Read: 2088
1MDB: Malaysian ex-PM appears in court over missing billions

Malaysia’s former prime minister Najib Razak abused his power to steal billions from the state to “obtain gratification for himself” and then conducted an elaborate charade to cover his tracks, prosecutors in Kuala Lumpur have said, the Guardian reports. 

The first day of the long-awaited trial of Najib over his involvement in a vast corruption scandal opened on Wednesday after months of delays with a blistering summary of his alleged crimes by the chief prosecutor, Gopal Sri Ram.

The 1MDB affair, which was exposed in 2015, has been described as the “biggest kleptocracy scandal in the world”. More than $4.5bn of state money was embezzled from a Malaysian government fund, known as 1MDB, and spent lavishly in Malaysia and around the world on everything from Manhattan real estate and diamonds to Pablo Picasso paintings and Hollywood films.

Najib, who served as Malaysia’s prime minister for nine years before being toppled from power last year, faces 25 charges including abuse of power. He is accused of transferring 2.3bn ringgit (£440m) out of 1MDB – almost one-quarter of its funds. Najib denies all charges and says he was misled by others involved in the running of the fund.

In his opening speech, Gopal said Najib “interfered with the course of investigation of this case … He took active steps to effect a cover-up of his criminal acts.”

Gopal said the relationship between the Malaysian businessman Jho Low and Najib would be central to the prosecution’s case.

Low was brought on as an informal consultant to 1MDB and became notorious for his ostentatious lifestyle, such as buying billions of Manhattan real estate and partying with celebrities, which it is alleged was funded by stolen 1MDB money. Low’s location is unknown. He has denied all the charges.

Gopal said Najib had “made it clear to 1MDB’s officers, its board and others that Jho Low was his alter ego. In truth, Jho Low was the accused’s mirror image … they acted as one.”

Najib and Jho Low had produced “sham documents” to “cover his tracks” including letters and four cheques totalling $25m to pretend the stolen 1MDB money was a donation from an Arab prince, Gopal said. “But these cheques were never meant to be cashed and were never cashed,” said Gopal.

Najib is the first former Malaysian prime minister to be charged with crimes carried out while in office. His lawyer, Shafee Abdullah, had unsuccessfully attempted to postpone the start of the 1MDB trial until September, claiming his team needed more time to prepare after the prosecution handed him thousands of pages of documents, but last week the judged ruled it would still go ahead. Six witnesses are due to be called by the prosecution on Wednesday.

It will be the second trial that the former prime minister has faced, and it is likely he will face a third. On Tuesday, proceedings wrapped up for Najib’s first trial, which related to SRC International, a fund that was a subsidiary of 1MDB. Najib is alleged to have siphoned an estimated $10m from SRC into his personal bank accounts, charges he also denies.

During the SRC trial, the profligate spending habits of Najib and his wife, Rosmah Mansor, were put on display in court, including Najib spending $800,000 in a single day at a luxury Swiss jeweller in Italy.

However, the 1MDB trial is considered the most significant, both for Malaysia and internationally. There are 1MDB investigations taking place in 12 countries, and in the US, the justice department recently charged two former Goldman Sachs bankers with conspiring to launder billions of dollarsembezzled from Malaysia’s state development fund.

 


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