Malaysia’s former prime minister Najib Razak pleads not guilty to money laundering charges

Photo by Hadi Azmi.

Malaysia’s former prime minister Najib Razak today (Wednesday) pleaded not guilty to three new charges at a High Court hearing in Kuala Lumpur.

Najib first appeared before Judge Azura Alwi, where the three money laundering charges were read to him, then he entered his pleas in High Court 3, where Judge Mohd Nazlan Mohd Ghazali was presiding.

On July 4, Najib pleaded not guilty to three charges of alleged criminal breach of trust and one of alleged abuse of power.

The prosecution and defence agreed today that all seven charges should be dealt with together in one trial.

Mohd Nazlan Mohd Ghazali replaced Mohamad Sofian Abdul Razak, who presided over the previous High Court hearing on July 4, but has been transferred from the High Court criminal division to the civil division.

After it emerged that Justice Mohd Sofian is the younger brother of a Pahang state leader of the United Malays National Organisation (UMNO), Mohd Soffi Abdul Razak, the Malaysian Bar called for the judge to recuse himself from the case.

UMNO is the leading party in the Barisan Nasional coalition that was ousted from power in elections in May. Najib resigned as UMNO president after the coalition’s shock election defeat.

Muhammad Shafee Abdullah (pictured left), who is leading the seven-person defence team, says that calls for Justice Sofian to recuse himself were made without any legal basis.

He says he has every confidence in the selection of Justice Nazlan, but adds that the defence lawyers and their client are concerned about the process of transfers “of the affected judges in the criminal division in the midst of a created controversy”.

Shafee said in a letter to the Chief Judge of The High Court of Malaya, Zaharah binti Ibrahim: “Given the high-profile nature of this case, we are very concerned that Justice Sofian was transferred without an opportunity being given to the learned judge (in consultation with parties) to decide on his recusal in an open court setting in a transparent manner.”

He pointed out that this is the first time in history that a Malaysian prime minister has been taken to court.

Shafee said the transfer of Justice Sofian could be prejudicial to his client’s constitutional right to a fair trial as the judge had already heard and dealt with some preliminary matters.

The new money laundering charges against Najib have been brought under Section 4(1)(b) of the 2001 Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act.

The breach of trust charges have been brought under Section 409 of the Penal Code. They each carry a maximum sentence of twenty years in jail. They also carry the penalty of caning, but, except in cases of rape, men aged over fifty are exempt and Najib is aged 65.

The abuse of power charge comes under Section 23 of the 2009 Malaysian Anti-Corruption Commission (MACC) Act. It also carries a maximum sentence of twenty years and a fine of no less than five times the value of funds siphoned or 10,000 ringgit, whichever is higher.

The charges centre on alleged corruption in relation to SRC International Sdn Bhd, a former subsidiary of the sovereign wealth fund 1Malaysia Development Berhad (1MDB).

In its investigations into allegations about 1MDB, the MACC has initially focused on the alleged siphoning of funds from SRC International to Najib’s account.

Najib faces allegations that 42 million Malaysian ringgit (about US$10.3 million) was transferred from SRC International to his personal bank account.

Najib’s government created SRC in 2011 to pursue overseas investments in energy resources. It was a subsidiary of 1MDB until it was transferred to the finance ministry in 2012.

The former prime minister was represented at today’s hearing by Muhammad Shafee Abdullah, who is leading the seven-person defence team,

The 12-strong prosecution team is led by the new attorney-general Tommy Thomas, but prosecutor Mohamad Hanafiah Zakaria made representations today.

Najib arriving at court on July 4.

On July 4, Najib was released on bail of one million ringgit (about US$245,000) in cash and that bail was today extended to cover the new charges.

The money laundering charges state that Najib received 42 million ringgit in his personal AmIslamic Bank Berhad account.

The money was allegedly siphoned from SRC International.

The charges further state that the former prime minister performed the transactions via Real Time Electronic Transfer of Funds and Securities (RENTAS) between December 26, 2014, and February 10, 2015.

The charges carry punishments of imprisonment for a term not exceeding fifteen years and a fine of not less than five times the sum or value of the proceeds of an unlawful activity “or instrumentalities of an offence at the time the offence was committed”, or five million ringgit, whichever is the highest.

On the first charge, Najib is accused of receiving 27 million ringgit from unlawful activity via RENTAS into his personal AmIslamic Bank account on December 26, 2014.

On the second charge, the former prime minister is accused of receiving 5 million ringgit from unlawful activities via RENTAS in his AmIslamic Bank account, also on December 26, 2014.

The third charge states that Najib received 10 million ringgit from unlawful activities via RENTAS in his AmIslamic Bank account on February 10, 2015.

It is also alleged that between December 24 and December 29, 2014, at the AmIslamic Bank Bhd, Najib committed a breach of trust involving a sum of 27 million ringgit.  Then prime minister and finance minister, Najib had a mandate to manage four billion ringgit in funds belonging to SRC International.

He is alleged, over the same period, to have committed a second breach of trust involving five million ringgit. It is also alleged that, from February 10 to March 2, 2015, he committed a third breach of trust involving 10 million ringgit.

In the abuse of power charge, it is alleged that, between August 17, 2011, and February 8, 2012, Najib abused his position to receive a 42 million ringgit bribe as an inducement to provide a government guarantee for a four billion ringgit loan from the Kumpulan Wang Persaraan pension fund to SRC International.

Najib was at that time of all the alleged offences prime minister and minister of finance.

On July 4, Justice Sofian imposed a temporary gag order on the media in Malaysia that banned publication of discussion of the merits of the charges against Najib.

The matter of the gag order will be discussed at a High Court hearing on Friday (August 10) and it is expected that a trial date will be set at that hearing.

On July 4, Tommy Thomas said the prosecution team vigorously opposed the order, which took them by surprise. There is no jury system in Malaysia and Thomas said the request for a gag order insulted the integrity and intelligence of professional judges who, he said, were not going to be influenced by what was published in the media.

Shafee said that he wanted to protect his client from trial by media. Najib was being “virtually hung” already, he said. “That’s not on,” Shafee said. “That’s not cricket.” He said he was talking about putting a gag on media reports, not on “coffee shop talk”.

Thomas responded that the rest of the world’s media would be commenting about the case and would not be bound by the gag order.

The gag order does not apply to media reporting on court proceedings.

Allegations of corruption and money laundering linked to 1MDB, which was founded by Najib in 2009, are being investigated in at least six countries, including Singapore, Switzerland, and the United States.

In civil lawsuits filed by the US Department of Justice, it is alleged that, between 2009 and 2015, more than $4.5 billion in the 1MDB fund was misappropriated by high-level officials of the fund and their associates.

Najib faces allegations that he channelled more than 2.6 billion ringgit (about US$642 million) from 1MDB into his personal bank accounts. He denies any financial wrongdoing in relation to 1MDB.

On June 27, the director of the federal commercial crime investigation department, Amar Singh, said the total value of items seized in recent raids on premises linked to Najib was estimated at between 900 million and 1.1 billion ringgit.



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