Malaysian ex-PM Najib Razak to learn verdict of first 1MDB trial on July 28

Najib is currently facing three separate, 1MDB-linked trials.
Najib is currently facing three separate, 1MDB-linked trials.PHOTO: AFP

KUALA LUMPUR (AFP) - A Malaysian court will hand down its verdict in Najib Razak's first corruption trial on Tuesday (July 28), nearly 16 months after it began probing the former prime minister's role in the multibillion-dollar 1MDB scandal.

Najib and his inner circle are accused of plundering sovereign wealth fund 1Malaysia Development Berhad (1MDB) in a mind-boggling fraud that stretched around the world.

Stolen cash was allegedly used to bankroll Hollywood hit The Wolf Of Wall Street, starring Leonardo DiCaprio, and US investment titan Goldman Sachs also became embroiled in the scandal.

Anger at the looting played a large part in the shock loss by Najib's coalition in elections two years ago after six decades in power.

He was subsequently arrested and hit with dozens of charges over the fraud.

Najib is currently facing three separate 1MDB-linked trials, and the first finally reaches its climax this week in the Kuala Lumpur High Court.

The case centres on the transfer of RM42 million (S$13.6 million) from former 1MDB unit SRC International into Najib's bank accounts.

He denies any wrongdoing, and his lawyer, Mr Muhammad Shafee Abdullah, told Agence France-Presse ahead of the verdict: "I feel good about the defence."

The former leader, who is facing four charges of corruption and three of money-laundering in the case, insists he was ignorant of the bank transfers.

His defence team has portrayed Najib as a victim and instead sought to paint financier Low Taek Jho, a key figure in the scandal who has been charged in the US and Malaysia, as the mastermind.

Low, whose whereabouts are unknown, maintains his innocence.

POLITICAL TURBULENCE

Prosecutors insist that Najib was in control of the 1MDB unit and that they have a solid case, but observers believe recent political upheaval in Malaysia could affect the outcome of the trial, which began in April last year.

 

Najib's scandal-mired party returned to power in March as part of a coalition after a reformist administration collapsed.

Since then, 1MDB-linked charges were unexpectedly dropped against the ex-leader's stepson Riza Aziz, one of the "Wolf of Wall Street" producers, in exchange for him agreeing to return assets to Malaysia.

Prosecutors also dropped dozens of charges against Najib's ally, Musa Aman, the former leader of Sabah state.

If Najib - currently free on bail - is convicted on Tuesday, he could be sentenced the same day.

Each charge of corruption carries a maximum jail term of 20 years, and each money-laundering count is punishable by a term of up to 15 years.

But the 67-year-old is likely to appeal against any conviction, and may not be jailed straight away.

If he is found guilty and the conviction is upheld, he would also be barred from political office for several years.

Ms Bridget Welsh, a Malaysia expert from the University of Nottingham, said a conviction would be viewed positively by many for bringing "some accountability on the scandal of 1MDB".

By contrast, an acquittal "will do serious damage to Malaysia's international reputation", she added.

The authorities in several countries are investigating the 1MDB theft, which funded a global spending spree that included the purchase of high-end real estate, artworks and a superyacht.

The amounts involved in Najib's first case are small compared with those in his second and most significant trial, which centres on allegations that he illicitly obtained over US$500 million (S$691 million).

 
 
 
 

The US authorities, who are investigating the fund because money was allegedly laundered through the American financial system, believe US$4.5 billion was looted from 1MDB.

Malaysia had charged Goldman Sachs and a string of its current and former staff as the investment bank had helped arrange bond issues worth US$6.5 billion for 1MDB.

Prosecutors had claimed that large amounts were misappropriated during the fund-raising.

But on Friday, Malaysia agreed to a US$3.9 billion settlement with Goldman in exchange for dropping all criminal proceedings against the Wall Street titan.