A tale of greed and corruption
It has been a decade since the 1MDB fund was established. In this time, billions of dollars were lost to greed and deceit. The ongoing trial of former Malaysian prime minister Najib Razak has hogged headlines for the past year. Will Malaysia find eventual closure?
On April 3, former Malaysian prime minister Najib Razak walked into the halls of the High Court in Kuala Lumpur, his head held high and smiling for the gathered media. He was confident, wearing a navy blue suit and a boldly patterned purple tie for his day in court.
Najib, who also had been the finance minister, was to face seven counts of abuse of power, criminal breach of trust, and money-laundering of RM42 million ($13.7 million) from SRC International, a subsidiary of 1Malaysia Development Bhd (1MDB).
A little over seven months later, after many shocking revelations in court, Najib has been called to enter his defence for the charges related to SRC International. On Nov 11, the High Court had determined that the prosecution had proved a prima facie case, and while Najib and his lawyer, Shafee Abdullah, had expressed their “shock” and “dismay” at the decision, the heat is on for Najib in what is believed to be the biggest and most wide-ranging graft scandal in recent years.
Najib is also on trial for four charges of abuse of power and 21 counts of money laundering of a staggering RM2.28 billion from 1MDB, and the trial, which began on Aug 28, is still ongoing. Najib will face the music for his involvement in the siphoning of an alleged RM2.6 billion from 1MDB coffers for his personal gain.
And, as they say, “when it rains, it pours”; Najib, along with former 1MDB CEO Arul Kanda, is also to face trial for tampering with the audit report of 1MDB in his time as premier. He had earlier this month failed to get a postponement of the trial for audit tampering, making it three for three.
Najib in the dock
So far, the three concurrent trials have been explosive — literally so in one instance, as a bomb threat was discovered in July — as witnesses reveal the alleged subterfuge and manipulation that went on behind the scenes, as well as the lavish lifestyles of both Najib and his wife, Rosmah Mansor, including RM3.3 million worth of jewellery as gifts to Saudi royalty.
Former Pensioners Trust Fund (KWAP) CEO Azian Mohd Noh said Najib was her
“ultimate boss”, thus she could not say he had no influence over KWAP’s decision to approve loans to SRC.
Former SRC chairman Ismee Ismail also said every SRC-related decision required the advice of the adviser emeritus — Najib — and it was former SRC CEO and 1MDB chief investment officer Nik Faisal Ariff Kamil who brought any issues that arose to Najib’s attention.
Former SRC director Ismee Ismail also testified that amendments were made to the company’s articles and memorandum of association, which gave Najib total control over the administration of the company. Loans for SRC were also guaranteed by the Finance Ministry, the High Court heard, in meetings where it was declared that Najib would “smoothen” things for SRC.
In addition, according to former SRC director Suboh Md Yassin, the prosecution’s 42nd witness, Nik Faisal could even forge signatures with the backing of someone
“higher up”. Nik Faisal is still on the run and wanted by the authorities.
As for the charges relating to 1MDB, witnesses have revealed the inner workings of the sovereign wealth fund, including the subterfuge wheeling and dealing that the disgraced premier had conducted with China, all in order to “save” the sinking 1MDB. Najib’s former special officer, Amhari Efendi Nazaruddin, told the court on Sept 4 that he was sent to persuade Chinese officials to help pay 1MDB’s debts — a task only Najib and businessman Low Taek Jho, or Jho Low, the alleged mastermind behind the 1MDB fund flows, knew about.
The projects, purportedly to help save 1MDB, included the East Coast Rail Link (ECRL), the Trans-Sabah Gas Pipeline, the Multi-Product Pipeline and the development of federal territory Labuan into an offshore banking and tourism hub. The ECRL, in particular, was a project fraught with delays and cost overruns, and has been post
poned indefinitely by the current Pakatan Harapan administration.
More shockingly, according to another witness, former 1MDB CEO Shahrol Azral Ibrahim Halmi, the central bank, Bank Negara, was not informed of the diversion of some US$700 million to Jho Low-linked Good Star (Seychelles). Shahrol, who helmed the company from 2009 to 2013, also admitted that the 1MDB-PetroSaudi joint venture, through which much of the funds from 1MDB were channelled, was a failure.
Money from 1MDB was also funnelled into the personal accounts of PetroSaudi International CEO Tarek Obaid. PSI is the company with which 1MDB had entered into a JV. Obaid had instructed that US$83 million be transferred into his personal account after PSI received US$500 million from 1MDB in 2010.
Secret recordings
As for the audit tampering trial, which began on Nov 18, damning evidence surfaced as the High Court was told how 1MDB executives and figures linked to Najib conspired to change the final copy of the 1MDB audit report and to have all versions of it, apart from their own, destroyed in 2016.
National Audit Department officer Nor Salwani Muhammadin had secretly recorded the proceedings of a meeting held on Feb 24, 2016, during which the decision was apparently made to modify and remove several issues from the department’s 1MDB audit report. She also kept a copy of the original 1MDB audit report, while the other copies were shredded on instructions by Najib and Arul at the height of the scandal. Furthermore, there were conflicting financial statements from 1MDB, as well as a lack of proper documentation submitted to the NAD for their report.
The trials continue amid growing pressure for Pakatan Harapan to bring to book those responsible for the 1MDB scandal. As Najib enters his defence, claiming his innocence and that he had been duped by Jho Low, Malaysians and, indeed, the world, waits to see whether the alleged perpetrators will be brought to justice.