Malaysia

Malaysia’s former prime minister Najib Razak goes on trial after lengthy delay

The trial of Malaysia’s former prime minister Najib Razak started today (Wednesday) at the Kuala Lumpur High Court after a seven-week delay. The trial that began today concerns just seven of the 42 charges Najib faces. He has pleaded not guilty to all 42 charges.

Najib’s trial began exactly a decade after he was sworn in as prime minister.

At the end of this afternoon’s hearing, proceedings were adjourned until April 15.

It is alleged in the seven charges being dealt with in the current trial that 42 million ringgit (about US$10.3 million) was transferred from SRC International to Najib’s personal bank accounts.

The defence filed a motion challenging the charges against Najib, but the High Court judge, Justice Mohd Nazlan Mohd Ghazali, ruled that the trial should start this afternoon and the challenge filed by the defence could be dealt with later.

The judge said there was no impediment to the defence’s application being heard after the start of the trial.

Justice Nazlan set April 15 to May 10 for the continuation of the trial. Appeals will be heard in the Federal Court in the meantime.

Lead defence counsel Muhammad Shafee Abdullah told the court that the defence team had filed a notice of motion to challenge the charges faced by Najib.

The attorney-general, Tommy Thomas, said the defence was trying to delay the trial yet again by emailing a set of papers challenging the charges at the 11th hour.

He said the defence’s application for another postponement was audacious and “another backdoor attempt to stop the trial starting”.

The current trial concerns only the allegations related to SRC International Sdn Bhd, a former subsidiary of the sovereign wealth fund 1Malaysia Development Berhad (1MDB).

Photo by Hadi Azmi.

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.

Najib’s trial had originally been scheduled to begin on February 12, but was postponed the day before.

When Najib arrived at the High Court today he was greeted by supporters and prayed with them before going into the building. Supporters chanted “hidup Najib” (“long live Najib”).

In his opening statement Thomas said it was his “duty and privilege” to open the first trial in Malaysia’s courts against a former prime minister, “who, for nearly a decade, occupied the most powerful office in the land and wielded near absolute power, which carries with it enormous responsibility, which my office intends to discharge in order to establish that the accused is guilty of the seven charges that he is facing …”

Thomas told the court that during Najib’s entire period in office as prime minister, at which time the alleged offences were committed, Najib simultaneously held the office of minister of finance, “thereby combining maximum political power and control of the nation’s purse”.

He added that “the highest trust was reposed by our people in the accused”.

Thomas also told the court that Najib chaired the 1MDB board of advisors and was “advisor emeritus” of SRC International.

“Not being satisfied with the holding of the twin positions of prime minister and minister of finance, the accused was also appointed the chairman of the board of advisors of 1Malaysia Development Berhad and advisor emeritus in its fully owned subsidiary, SRC International Sdn Bhd,” he said.

Thomas added: “A common feature of both companies was that the true power in directing and managing their affairs did not lie with the board of directors, as is required by law and is the universal practice wherever companies carry on business, but in the person of the accused by virtue of his holding these two positions.”

The prosecution’s first witness, the assistant registrar of the Companies Commission of Malaysia (CCM), Muhamad Akmaludin Abdullah, gave evidence today.

Thomas said in his opening statement that evidence would establish that, in December 2014, Najib’s credit card was charged US$130,625 for purchases at the Chanel fashion store in Honolulu.

He also said evidence would establish that Najib issued personal cheques for payment for renovation work carried out on his residences at No.11 Jalan Langgak Duta, Kuala Lumpur, and in Pekan, Pahang. Cheques were also issued to various Barisan Nasional component political parties, Thomas said.

Thomas added: “A former prime minister is charged under due process in the ordinary court of the land, like any other accused.  The accused is not above the law and his prosecution and this trial should serve as precedents for all future holders of this august office.”

On July 4 last year, Najib pleaded not guilty to three charges of alleged criminal breach of trust and one of alleged abuse of position and, on August 8, he pleaded not guilty to three money laundering charges.

Thomas told the court today that, with regard to the abuse of position charge brought under Section 23 of the 2009 Malaysian Anti-Corruption Commission (MACC) Act, evidence would establish that the accused “at all material times, as an officer of a public body, to wit, as prime minister and minister of finance, used his office and/or position to obtain for himself a gratification of RM42 million”.

Evidence would also abundantly establish, Thomas said, that Najib was directly involved in the decision on behalf of the government of Malaysia to give government guarantees for the loans amounting to RM4 billion received by SRC International from the retirement fund for civil servants, Kumpulan Wang Persaraan (Diperbadankan).

On March 27, the Federal Court allowed the prosecution’s appeal to lift the stay order on the trial that had been granted by the Court of Appeal and ordered the high court to set dates for the trial to begin. Najib wanted the proceedings stalled pending disposal of his three appeals over several interlocutory matters.

There will be another hearing in the Federal Court tomorrow (Thursday).

SRC charges

In its investigations into allegations about 1MDB, the Malaysian Anti-Corruption Commission initially focused on the alleged siphoning of funds from SRC International to Najib’s account.

The three 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 position charge 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.

It is 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, between February 10 and March 2, 2015, he committed a third breach of trust involving 10 million ringgit.

Thomas said today: “To prove the prosecution case beyond a reasonable doubt, the prosecution will be relying on direct and circumstantial evidence, both oral and and documentary, to prove that the accused, on the dates, times and manner as contained in the charges, is guilty of each of the charges against him.”

Shafee said in a press conference that today’s proceedings were “hardly a trial”. He said the prosecution simply wanted to go on record as having started the trial.

It was an accused person’s right, Shafee said, to request more particulars of charges and for those charges to be better clarified.

Shafee said the defence wanted to avoid prejudice in the trial and argued that their notice of motion should have been heard today.

He pointed out that two court of appeal panels has said the defence was not “delaying” the trial.

He also criticised Thomas’s opening statement, saying Thomas did nothing more than talk about the charges and didn’t follow proper procedure. He should, Shafee said, have been presenting the prosecution case and stating the manner in which the prosecution was going to prove that case.

Other allegations

In the case of 25 charges brought on September 20, Najib is accused of using his position as prime minister, finance minister, and chairman of 1MDB to obtain nearly 2.3 billion ringgit (about US$556.23 million) in illegal transfers to his own accounts between 2011 and 2014.

Najib and former treasury secretary-general Mohd Irwan Serigar Abdullah were charged on October 25 at the Sessions Court with six counts of criminal breach of trust allegedly involving more than 6.6 billion ringgit of government funds. They pleaded not guilty to all charges.

Najib has also pleaded not guilty to one charge of tampering with a 1MDB final audit document.

He was accused of using his position as prime minister to order alterations to the 1MDB final audit report before it was tabled to the Public Accounts Committee so as to avoid any civil disciplinary action being taken against him.

The charge was brought under Section 23(1) of the 2009 Malaysian Anti-Corruption Commission Act.

Najib has also pleaded not guilty to three additional charges relating to SRC that are not being dealt with in the current trial.

In the additional charges, it is alleged that Najib laundered 47 million ringgit through three private bank accounts in July 2014.

These three charges were brought under Section 4(1)(b) of the 2001 Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act.

For procedural reasons, the prosecution had withdrawn the three additional charges on February 7, and asked for Najib to be given a discharge not amounting to an acquittal. The next day Najib pleaded not guilty to the same three charges at the Sessions Court.

On February 11, Judge Mohd Nazlan Mohd Ghazali allowed the application by the prosecution to transfer the three charges from the Sessions Court to the High Court.

However, the judge dismissed the prosecution’s application for the three additional charges to be dealt with in the same trial as the seven initial charges relating to SRC International. He said he had no issue with the transfer per se, but the issue of a joint trial was premature because it was within the jurisdiction of the High Court that tries the matter.

No application was made today for a joint trial including those three charges

Postponement applications

On February 11, a panel of three appellate court judges – Ahmadi Haji Asnawi, Mohamad Zabidin Mohd Diah, and Yew Jen Kie – unanimously allowed the defence’s application for a postponement.

The appeal related to the prosecution’s withdrawal of a 418A certificate of transfer of the initial seven charges.

At the Sessions Court last year, the prosecution issued a certificate under Section 418A of the Criminal Procedure Code to transfer the cases from the Sessions Court to the High Court.

On February 7, the High Court judge Justice Mohd Nazlan Mohd Ghazali allowed the prosecution’s application to withdraw the certificate. Tommy Thomas said he wished to withdraw the certificate so as to avoid any possible argument that the transfer was null and void.

Justice Nazlan also exercised his discretion to order the transfer of the seven charges from the Sessions Court to the High Court.

Shafee Abdullah said the withdrawal of the certificate had affected the entire trial. He also said that it was “ridiculous” to add three new charges just before the trial was due to start.

On April 1 Najib tried again to have the trial postponed and filed a review application against the Federal Court’s refusal to grant him an order to stay the trial on the SRC charges.

Najib is also appealing tomorrow to obtain a gag order to prohibit the media and public from discussing the merits of his criminal case and access to certain investigation documents and over the attorney-general’s withdrawal of his transfer certificate.

The prosecution will be appealing in the Federal Court against the Court of Appeal’s granting of Najib’s application to have the prosecution produce the letter appointing lawyer Sulaiman Abdullah to lead the prosecution in the SRC case.

The Barisan Nasional coalition led by Najib, who is the MP for Pekan, was ousted by the opposition in Malaysia’s 14th general election in May last year. It was the first time since the country gained its independence from Britain in 1957 that the ruling coalition lost an election.

Full opening statement by Tommy Thomas:

May it please Your Lordship,

1.    It is my duty and privilege to open the first trial in our courts against a former Prime Minister, who for nearly a decade, occupied the most powerful office in the land and wielded near absolute power, which carries with it enormous responsibility, which my office intends to discharge in order to establish that the Accused is guilty of the seven (7) charges that he is facing before Your Lordship.

2.    The Accused during his entire period in office as Prime Minister, at which time these offences were committed, simultaneously held the office of Minister of Finance, thereby combining maximum political power and control of the nation’s purse. In holding the office of the Prime Minister, and thus the nation’s highest elected public officer and Head of Government, the highest trust was reposed by our people in the Accused.  In such circumstances, the law demands the highest standards of care in the discharge by the Accused of his duties and obligations as trustee of public offices.

3.    Not being satisfied with the holding of the twin positions of Prime Minister and Minister of Finance, the Accused was also appointed the Chairman of the Board of Advisors of 1Malaysia Development Berhad (“1MDB”) and Advisor Emeritus in its fully owned subsidiary, SRC International Sdn. Bhd. (“SRC International”). A common feature of both companies was that the true power in directing and managing their affairs did not lie with the Board of Directors, as is required by law and is the universal practice wherever companies carry on business, but in the person of the Accused by virtue of his holding these two positions.

4.    The operation of Article 8(1) of the Federal Constitution that “all persons are equal before the law” is amply demonstrated by this trial.  A former Prime Minister is charged under due process in the ordinary court of the land, like any other Accused.  The Accused is not above the law and his prosecution and this trial should serve as precedents for all future holders of this august office.

My Lord,

5.    This trial is the first of many kleptocracy-1MDB-linked prosecutions. As required under Section 179 of the Criminal Procedure Code, I will state briefly the nature of the offences charged and the evidence by which the Prosecution proposes to prove the guilt of the Accused.

6.    In the instant prosecution, the Accused is charged for the following offences —

a.    One (1) charge under Section 23 of the MACC Act 2009 for abuse of position;
b.    Three (3) charges under Section 409 of the Penal Code for criminal breach of trust;
c.    Three (3) charges under Section 4(1)(b) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 for money laundering; and

7.    To prove the prosecution case beyond a reasonable doubt, the Prosecution will be relying on direct and circumstantial evidence, both oral and documentary, to prove that the Accused, on the dates, times and manner as contained in the charges, is guilty of each of the charges against him.

One (1) charge under Section 23 of the MACC Act 2009 for abuse of position

8.    For the charge under Section 23 of the MACC Act 2009, evidence will establish that the Accused at all material times, as an officer of a public body, to wit, as Prime Minister and Minister of Finance, used his office and/or position to obtain for himself a gratification of RM42 million. Evidence will abundantly establish that the Accused was directly involved in the decision on behalf of the government of Malaysia to give government guarantees for the loans amounting to RM4 billion received by SRC International Sdn Bhd from Kumpulan Wang Persaraan (Diperbadankan) (“KWAP”).

9.    In proving the ingredients of Section 23 of the MACC Act 2009, evidence — oral, documentary and/or circumstantial, will be led by the prosecution to establish the following —

a.    Proposed establishment of SRC International Sdn Bhd;

b.    Proposed setting-up grant of RM3 billion;

c.    SRC International’s request for a government loan for RM3.95 billion;

d.    The appointment of SRC International’s Board of Directors, and the appointment of one Nik Faisal Ariff Kamil as CEO of SRC International;

e.    Matters that led to the approval of the Government of Malaysia through the Ministry of Finance for the issuance of a RM2 billion government guarantee in favour of SRC International;

f.    Matters that led to the approval of the Government of Malaysia through the Ministry of Finance for the issuance of a further RM2 billion government guarantee in favour of SRC International;

g.    Monies totalling RM42 million, sourced from SRC International, were channelled through the company accounts of Gandingan Mentari Sdn Bhd (a wholly-owned subsidiary of SRC International Sdn Bhd) and Ihsan Perdana Sdn Bhd (purportedly appointed as SRC International’s corporate social responsibility partner);

h.    The Accused, between 17 August 2011 and 8 February 2012, as a result of the aforesaid, had received as gratification the said monies totalling RM42 million into his AmPrivate Banking-1MY no. 211-202-201188-0 and AmPrivate Banking-MY no. 211-202-201190-6 bank accounts.

Three (3) charges under Section 409 of the Penal Code for criminal breach of trust

10.    For the charges under Section 409 of the Penal Code, evidence will establish that the Accused at all material times, as agent, to wit, as Prime Minister and Minister of Finance, and Advisor Emeritus of SRC International, whilst entrusted with monies belonging to SRC International, committed criminal breach of trust in respect of the RM27 million, RM5 million and RM10 million belonging to SRC International.

11.    In proving the ingredients of Section 409 of the Penal Code for criminal breach of trust, evidence — oral, documentary and/or circumstantial, will be led by the prosecution to establish  the following —

a.    A Special Resolution was passed to amend SRC International’s Articles of Association to appoint the Accused as Advisor Emeritus. As Advisor Emeritus the Accused shall advise the Company’s Board on material matters and matters of strategic interest to Malaysia, and that the Board shall give due consideration to and implement any advice of the Advisor Emeritus in the best interest of the Company;

b.    That the Accused had dishonestly caused himself to wrongfully gain RM42 million and/or caused SRC International to wrongfully lose RM42 million;

c.    That between 24 and 29 December 2014, a sum of RM27 million belonging to SRC International was remitted to the Accused’s AmPrivate Banking-1MY no. 211-202-201188-0 account through the company accounts of Gandingan Mentari Sdn Bhd and Ihsan Perdana Sdn Bhd;

d.    That between 24 and 29 December 2014, a sum of RM5 million belonging to SRC International was remitted to the Accused’s AmPrivate Banking-MY no. 211-202-201190-6 account through the company accounts of Gandingan Mentari Sdn Bhd and Ihsan Perdana Sdn Bhd; and

e.    That between 10 February and 2 March 2015, a sum of RM10 million belonging to SRC International was remitted to the Accused’s AmPrivate Banking-1MY no. 211-202-201188-0 account through the company accounts of Gandingan Mentari Sdn Bhd and Ihsan Perdana Sdn Bhd.

Three (3) charges under Section 4(1)(b) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 for money laundering

12.    For the charges under Section 4(1)(b) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 for money laundering, evidence — oral, documentary and/or circumstantial, will be led by the prosecution to establish the following —

a.    That the Accused on or about 26 December 2014 engaged in money laundering to wit by receiving RM27 million, being the proceeds of an unlawful activity, in the Accused’s AmPrivate Banking-1MY no. 211-202-201188-0 account;

b.    That the Accused on or about 29 December 2014 via a Real Time Electronic Transfer of Funds and Securities (“RENTAS”) instruction, remitted RM27 million, being the proceeds of an unlawful activity, from the Accused’s AmPrivate Banking-1MY no. 211-202-201188-0 account to the company account of Permai Binraya Sdn Bhd;

c.    That the Accused on or about 26 December 2014 engaged in money laundering to wit by receiving RM5 million, being the proceeds of an unlawful activity, in the Accused’s AmPrivate Banking-MY no. 211-202-201190-6 account;

d.    That the Accused on or about 29 December 2014 via a Real Time Electronic Transfer of Funds and Securities (“RENTAS”) instruction, remitted RM5 million, being the proceeds of an unlawful activity, from the Accused’s AmPrivate Banking-MY no. 211-202-201190-6 account to the company account of Putra Perdana Construction Sdn Bhd;

e.    That the Accused on or about 10 February 2015 engaged in money laundering to wit by receiving RM10 million, being the proceeds of an unlawful activity, in the Accused’s AmPrivate Banking-1MY no. 211-202-201188-0 account;

f.    That the Accused on or about 10 February 2015 remitted RM10 million, being the proceeds of an unlawful activity, from the Accused’s AmPrivate Banking-1MY no. 211-202-201188-0 account to the Accused’s AmPrivate Banking-MY no. 211-202-201190-6 account;

g.    That the Accused had issued a total of 15 personal cheques from his AmPrivate Banking-MY no. 211-202-201190-6 account totalling an approximate sum of RM10,776,514.00;

h.    Evidence will also establish that in December 2014, the Accused’s credit card was charged US$130,625 for expenses made at Chanel, an exclusive fashion store in Honolulu; and

i.    Evidence will establish that the personal cheques were issued for, among others, payment for renovation works carried out at the Accused’s residence at No.11 Jalan Langgak Duta, Kuala Lumpur, the Accused’s residence in Pekan, Pahang and cheques issued to various Barisan Nasional component political parties.

My Lord,

13.    The burden is now on the Prosecution to prove, beyond a reasonable doubt, that the Accused, Mohd. Najib bin Hj Abd Razak is guilty of the criminal charges preferred against him at this trial.

 

Update 7/4/2019

The Federal Court judges who, last Thursday and Friday, heard four appeals in the SRC case – three by the defence and one from the prosecution – will deliver their decision next Wednesday (April 10).

Update 11/4/2019

The Federal Court judges dismissed all three of Najib’s appeals that it heard last Thursday and Friday, which are related to the SRC International case.

The seven-judge panel ruled in favour of the attorney-general, Tommy Thomas, allowing his appeal against the Court of Appeal’s granting of Najib’s application to have the prosecution produce the letter appointing lawyer Sulaiman Abdullah to lead the prosecution in the SRC case.