KUALA LUMPUR - Former Malaysian prime minister Najib Razak has pleaded not guilty to four charges levelled against him in court on Wednesday (July 4).

He faces three counts of criminal breach of trust and one count of abuse of power - in connection with the 1Malaysia Development Berhad (1MDB) scandal that led to his political downfall. His seven-man defence team is led by senior lawyer Muhammad Shafee Abdullah.

Bail was set at RM1 million (S$337,000) and Najib was asked to surrender his two passports - a standard issue one and a diplomatic one - to the court. He left the court after posting bail and vowing to clear his name.

The charges carry sentences of no less than two years and up to 20, with possible caning and fines. Under Malaysian law, however, men aged 50 and above are exempt from caning. Najib will turn 65 later this month.

Newly appointed Attorney-General Tommy Thomas leads the 12-strong prosecution team. He did not oppose bail for Najib, and requested it be set at RM4 million in a cash bond with two sureties. He also asked for Najib's passport to be surrendered to the court.

Najib's lawyer Muhammad Shafee asked for the bond to be reduced, taking into account the service his client has rendered to the public.

On the defence team's request, Judge Mohamad Sofian Abdul Razak agreed to issue an interim court order barring discussions on the merits of the case outside the court, especially in the media.

Mr Shafee had asked for a court order to bar the media from making speculative or false reports regarding witnesses in the trial as he said his client had been put through trial by media.

The gag order will be in place until Aug 8, when the matter is scheduled for case management. The trial is set to take place next year, from Feb 18 to 28, March 4 to 8, and 11 to 15.

Najib was charged with criminal breach of trust involving RM27 million, RM5 million and RM10 million belonging to SRC International, which was entrusted to him between December 2014 and March 2015 when he acted as the company's adviser. He was also the prime minister and finance minister at that time.

SRC, an energy company that was originally a subsidiary of state fund 1MDB, was placed under the jurisdiction of the Finance Ministry in 2012.

The three charges of criminal breach of trust fall under Section 409 of the Penal Code. They carry a maximum of 20 years' jail, caning and possible fines.

Najib was also charged with abuse of power for accepting a RM42 million bribe when he took part or was involved in making the decision to provide government guarantees for a RM4 billion loan from pension fund Kumpulan Wang Persaraan (KWAP) to SRC.

The charge under Section 23 of the Malaysian Anti-Corruption Commission (MACC) Act 2009 carries a maximum sentence of 20 years and a fine of not less than five times the value of the bribe.

Najib nodded when the charges were read out to him. He looked grim and his jaw was drawn tight.

As he was leaving the court, Najib told reporters: "I am confident of my innocence, I believe in my innocence and this is the best chance to clear my name."

He added: "If this is the price I have to pay for 42 years I served the people and the country... I am willing."

In a media conference after the hearing on Wednesday, Mr Thomas declined to say whether there would be further charges drawn up against Najib.

"This (case) is arising from the first MACC IP that was given to my office three weeks ago," he said, referring to investigation papers prepared by the anti-graft agency. "This is the fruit of that investigation. No doubt there will be more IPs."

Najib was arrested on Tuesday by Malaysia's anti-graft agency and spent the night in detention.

Mr K. Kumaraendran, the lawyer for Najib's wife Rosmah Mansor, told reporters in the morning that he had advised her not to go to court. She was however seen at the courthouse later in the afternoon, leaving with Najib.

The couple's two children, businessman Ashman Najib, 27, and Nooryana Najwa Najib, 30, were in court on Wednesday morning. Son-in-law Daniyar Kessibayev, 27, who is from Kazakhstan, and entrepreneur Mohd Nazifuddin Mohd Najib, 32, the former prime minister's son from his first marriage, were also present.

Najib's arrival at the court complex sparked a scramble among the hundreds of reporters and supporters who had gathered there since 6am. Some were heard chanting "God save Najib!"

Among leaders from Najib's party there to show solidarity with their former party president were Umno vice-president Ismail Sabri, Supreme Council member Noh Omar, Women's Chief Noraini Ahmad and Youth Chief Asyraf Wajdi.

According to a statement issued by the government's 1MDB Taskforce, Najib was picked up at his mansion in Jalan Langgak Duta in Kuala Lumpur at 2.35pm on Tuesday in relation to SRC International.

It has been alleged that out of billions of ringgit found in his personal bank accounts, RM42 million is believed to have been transferred from SRC International.

The arrest came exactly three years since it was first reported that US$700 million linked to 1MDB was found in Najib's personal accounts.

Najib has denied any wrongdoing, saying the money in his accounts were a political donation from Saudi royalty, and that he has never abused public funds for personal gain. He said that he has returned the money.

The scandal caused widespread anger among voters, leading to Najib's ouster during the May 9 general election, effectively ending Barisan Nasional's 61-year rule in Malaysia.

In a statement released on Tuesday, Najib's spokesman said the charges "are politically motivated and the result of political vengeance" by the Pakatan Harapan leadership under Prime Minister Mahathir Mohamad.

Najib will contest the charges and clear his name in court, it added.

The former premier has been the focus of a renewed investigation into troubled state fund 1MDB since being ousted from power in May.

Police have raided several homes linked to him and his family, seizing cash, jewellery, luxury watches and handbags that were later valued at a total of more than RM1 billion. Najib and Datin Seri Rosmah were also questioned by Malaysia's anti-graft agency over fund transfers at SRC International.

In an interview with news agency Reuters in June, Najib said the public seizure of handbags and other luxury items created a negative perception but that most were gifts given to his wife and daughter and had nothing to do with 1MDB.

He said his son-in-law, Mr Daniyar, the nephew of Kazakhstan President Nursultan Nazarbayev, also gifted many of the handbags to Madam Rosmah.

"People might find it hard to understand, but my son-in-law, for example, he gets Birkin from his source, five or six at one go," he said, referring to the iconic handbag from French label Hermes. "His family has got some means, so it has nothing to do with 1MDB if it comes from Kazakhstan."

A pre-recorded video was also released on the former premier's social media accounts on Tuesday, saying he and his family are "being tested".

Najib's stepson Riza Aziz was questioned on Tuesday at MACC headquarters, where the former prime minister was taken into custody, over claims that funds misappropriated from 1MDB were used to finance several Hollywood movies produced by his film company, Red Granite Pictures.