The Edge Court Judgments Report
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27 Jan 2022, 04:00 pm
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This article first appeared in The Edge Malaysia Weekly on January 17, 2022 - January 23, 2022

This monthly report is compiled and briefly summarised by a group of lawyers on a voluntary basis for the benefit of readers of The Edge.

Please consult your own lawyers if you need advice on the cases, issues and related matters highlighted here.

 

 

 

CRIMINAL LAW

Court of Appeal (‘CA’) affirms decision of the High Court  (‘HC’) against Dato’ Sri Mohd Najib

The case of Pendakwa Raya v Dato’ Sri Mohd Najib Bin Hj Abdul Razak in the HC consumed a total of approximately 86 days, with the prosecution calling 57 witnesses and the defence calling 18 other witnesses. On 5.10.2020, The Edge had published a summary of the decision of the learned Judge of the HC, which found the former Prime Minister guilty of all 7 charges. The accused (‘Appellant’) appealed against both conviction and sentence in respect of all 7 charges. On 8.12.2021, the CA in a unanimous decision dismissed the appeal of the Appellant and upheld the conviction and sentence. Below is a summary of the decision of the CA (Abdul Karim Jalil, Has Zanah Mehat and Vazeer Alam JJCA) delivered by Abdul Karim bin Abdul Jalil JCA.

 

SUMMARY OF APPELLANT’S APPEAL

1.     NO PRIMA FACIE CASE ESTABLISHED IN RESPECT OF THE SEVEN CHARGES

The thrust of the Appellant’s appeal that the prosecution had not established a prima facie case against him was premised on the ground that the learned Judge of the HC, Nazlan J, in his written judgment dated 28.7.2020 (‘Grounds of Judgment’) had made ‘material additions’ to his oral summary of findings delivered at the close of the prosecution case. Additionally, the issue of admissibility of documents had yet to be made at the close of the prosecution case and Nazlan J had also ‘added findings in the Grounds of Judgment’ after the prosecution had concluded its case. In short,  the Appellant’s complaint was that Nazlan J ‘did not keep to his oral summary of findings made and pronounced at the end of the prosecution case’ that a prima facie case had been established in respect of the 7 Charges.

 

Decision on no prima facie case

Trial Judge did not make  any ‘material additions’

The CA  accepted the principle that the prosecution’s case must stand or fall on the evidence as it stood at the close of the prosecution’s case and the prosecution cannot seek to improve or supplement its case that may be elicited from the defence except in very special circumstances. However, there is no rigid principle of law that a trial Judge must give or record his reasons for finding a prima facie case, although this is encouraged. The CA rejected this ground of appeal  because (a) the learned trial Judge did give  and indicated that it was only a summary of the reasons or his key findings that a prima facie case had been established; (b) in the Grounds of Judgment, the learned trial Judge merely elaborated in a comprehensive way of his key findings; and (c) the prosecution did not attempt to adduce further evidence or rebuttal evidence during the defence.

 

From left: Abdul Karim bin Abdul Jalil, Has Zanah binti Mehat and Vazeer Alam bin Mydin Meera JJCA

[77] … in the present case we do not find any attempt by the prosecution to adduce further evidence or rebuttal evidence during the defence case, nor is there any attempt by the prosecution to supplement or close any gap in their case by reference to the evidence adduced by the defence. The appellant’s main complaint is that the learned trial judge in the final judgment did not keep to his oral summary of findings made and pronounced at the end of the prosecution case on the issue of prima facie case. We do not find any merit in that contention…

[81] …though the learned trial judge gave some reasons for his findings, he had specifically caveated that by stating that his pronouncement was just a summary of the key findings. This clearly indicates that if required at the end of the defence case, he would give a more comprehensive account of his findings on the prima facie case…The learned trial judge did not supplement nor close any gap in his earlier oral ruling. He had merely given a comprehensive and more detail reasoning for his finding that the prosecution had proved a prima facie case for all seven charges…

[86] The fact of the matter is that, by the oral ruling the appellant was not prejudiced. The appellant knew very well what the case against him was, he was not prejudiced for not being able to put up his defence properly. There was concerted and focused attack on every aspect of the prosecution’s case, and on each and every element of the seven offences, and the prosecution’s evidence in respect of that was vigorously challenged.  

Justice Abdul Karim

 

Documents were properly admitted into evidence

The argument that the contents of certain documents had yet to be admitted in evidence was also dismissed. In particular, the learned trial Judge admitted the documents into evidence after the Appellant had admitted that the signatures on the documents were his signatures.

[87] As to the contents of the documents that were yet to be admitted as evidence during the prosecution case, the witnesses for the prosecution were extensively cross-examined on these documents by counsel for the appellant, they were ultimately admitted as evidence by the trial judge after the appellant had himself confirmed his signature on the documents, and also by virtue of the non-obstante provision in the MACC Act. Again, we do not find the appellant being prejudiced by the reference to these documents by the learned trial judge in his Grounds of Judgment when discussing his findings on prima facie case.

[88] In the premise, we do not find any misdirection on the part of the learned trial judge on the assessment of the prima facie case, nor is there any enlargement of that finding as contended by learned counsel for the appellant. The learned trial judge had not supplemented nor improved on the grounds in which the prima facie findings were made. The oral ruling was accompanied by a summary of the key findings, which by implication means that the learned trial judge when ultimately writing his judgment would have a more comprehensive account of his reasoning and findings. The appellant has not been asked to answer matters beyond the findings in the oral ruling, nor has it infringed the appellant’s constitutional right to a fair trial.

 

2.  The MACC CHARGE

In essence, the charge under s 23(1) of the MACC Act was that the former Prime Minister had used his office or position for gratification for himself. Section 3 of the MACC Act defines an “officer of a public body” to include ‘a member of the administration, a member of Parliament’ and ‘any person receiving remuneration from public funds’. The CA upheld the decision of the HC that the Appellant had used his public office for gratification.

 

Decision on MACC charge

Appellant was an officer of a public body

In the HC, the Appellant did not challenge that he was an officer of a public body, the first element comprised in the offence. Nonetheless, the learned trial Judge had analysed the law, which was affirmed by the CA as a matter of law.  

[94] …we agree…that the appellant is clearly an officer of a public body on three separate counts. First, as a member of the administration, secondly as a Member of Parliament and thirdly as a person receiving remuneration from public funds. There is overwhelming evidence establishing the fact that the appellant was at the material time the Prime Minister, Finance Minister, Member of Parliament, and was receiving remuneration from public funds…we find that the learned ­trial judge’s conclusion is well supported by the evidence and the law, and in fact there is no serious challenge by the appellant in respect of this finding…

 

Appellant did use his public office for gratification

The CA agreed with the findings of the learned trial Judge that the second element comprised in the offence — using office or position for any gratification — had been made out by the prosecution by relying on the rebuttable presumption of gratification in s 23(2) of the MACC Act by proving the presence of  two basic elements, namely (a) the making of any decision or taking any action; and (b) the decision or action concerned a matter in which the accused person had a direct or indirect interest. Actual receipt of gratification is not necessary. It is enough that the accused person had used his office for gratification. In this regard, the Appellant played an active role before and at the two Cabinet meetings in approving the grant of the two government guarantees and he did not declare his interest in the subject matter.  

[103]    … the appellant took part in the two Cabinet decisions to issue the two government guarantees to KWAP for the loans granted by KWAP to SRC is beyond question. The evidence shows that the appellant was not only present but in fact chaired the two Cabinet meetings held on 17.8.2011 and 8.2.2012, and was thus involved in the decisions of the Cabinet to approve the said government guarantees in favour of KWAP. Tan Sri Mazidah Abdul Majid… who was the then Deputy Head Secretary (Cabinet) in the Prime Minister’s Department confirmed that fact.

[104] The law is well settled in that the physical presence of the appellant at the Cabinet meetings that approved the government guarantees was in law sufficient to establish that he had used his office or position for gratification if it can be shown that he had an interest in those decisions…Tan Sri Mazidah Abdul Majid… further testified that in respect of the first Cabinet decision on 17.8.2011 the relevant papers and memorandum… dated 15.8.2011 that were presented to the Cabinet was stated to be from the Prime Minister, i.e. the appellant, and they were tabled by Tan Sri Nor Mohamed Yakcop, then a Minister in the Prime Minister’s Department. Whilst for the second Cabinet decision on 8.2.2012, the memorandum dated 3.2.2012… came from the Finance Minister, and it was signed by the Appellant himself.

[105] [Tan Sri Nor Mohamed Yakcop] also confirmed that the appellant did not declare his interest in both Cabinet decisions, nor did he withdraw from the discussion in respect of these two items on the agenda, nor did he leave the meetings. Such conduct would militate against the appellant and would go towards establishing the charge under section 23(1) MACC Act. When an officer of a public body is present in a meeting where any matter placed for consideration places him in a conflict position, i.e. between his official position and his private interest, then he is duty-bound to declare his interest and withdraw and excuse himself from deliberation of that matter. The implication of the failure to disclose that personal interest in the subject matter of the decision is that it gives rise to an inference that the person knew or ought to have known of the conflict between his personal interest and public duty and chose to keep that under wraps. And such failure to distance or extricate himself completely from having to make or be part of the making of the impugned decision is sufficient to regard him in law to have used his office or position for gratification, for such participation in the decision-making process would be in furtherance of his personal interest… Therefore, there is on the shoulder of every public officer the heavy burden and duty to ensure that there is no conflict of interest in every official decision-making process…

[110] …The learned trial judge concluded from the evidence of the appellant’s role and involvement in the establishment of SRC, the initial set-up grant, KWAP loans, government guarantee arrangement, as well as the ownership and governance structure of SRC, and the control of the SRC funds and the flow of some of SRC’s funds into the personal accounts of the appellant establishes the fact that the appellant had an interest in SRC that was beyond that of his public office…

[112] The offence under section 23(1) MACC Act is one of abuse of position by an accused with the intention to obtain gratification. It concerns the prohibition against a public officer using his office for gratification. The words “using office or position for gratification” in section 23(1) suggests effort/demand by the accused to secure some benefit/advantage, i.e. some gratification as defined in section 3 of the MACC Act, and not actual receipt of it. Hence, we agree with the learned trial judge that actual receipt of gratification is not an element of an offence under section 23(1) MACC Act. The completeness of the offence does not depend on the receipt of gratification. What must be shown, however, is that the use of the position was to obtain gratification.

 

Rejection of defence that s 23(1) of the MACC Act was not applicable because of s 23(4)

Section 23(4) of the MACC reads:

(4) This section shall not apply to an officer who holds office in a public body as a representative of another public body which has the control or partial control over the first-mentioned public body in respect of any matter or thing done in his capacity as such representative for the interest or advantage of that other public body.

The CA held that the learned trial Judge was correct in holding that s 23(4) contemplates two public bodies and  the  evidence did not show that the actions of the Appellant were carried out in the interest of the nation.

[114] The learned trial judge quite correctly opined that section 23(4) contemplates two public bodies. The accused in order to avail himself of this provision must be shown to be holding office in the first public body as a representative of another public body which is controlled by the first-mentioned public body. And the decision or action done by the accused as the representative must be for the advantage of the second public body.

[115] The learned trial judge analysed the appellant’s contention as regards the application of section 23(4) and doubted that the appellant could be deemed as an officer of SRC and representative of the Government. The appellant’s role in SRC was by virtue of his position as Prime Minister at the material time. He was granted special powers in the M&A of SRC because of his position in the Government. That cannot be translated to the appellant being an officer of SRC. Nor can the appellant’s shareholder role in SRC, via MOF Inc., be construed to make the appellant an officer of SRC. The learned trial judge found that section 23(4) cannot apply to the appellant as it has not been shown that the actions taken by the appellant which led to the Government’s decision to grant the two government guarantees in favour of KWAP guaranteeing the loans granted to SRC were done in the interest or to the advantage of the Government of Malaysia.

[116] …on the totality of the evidence, it cannot be said that what the appellant did, including his participation at the two Cabinet meetings approving the guarantees in his capacity as representative of the first entity was for the interest, benefit or advantage of the Government. The learned trial judge set out seven reasons in the Grounds of Judgment why the actions of the appellant cannot be for the benefit of the Government…

 

Rejection of defence that there was no nexus between corrupt intention at time of Cabinet’s decision and the subsequent deposit of RM42 million into the Appellant’s personal accounts

The Appellant unsuccessfully argued that because there was a ‘time gap’ between the deposit of RM42 million into the Appellant’s personal accounts and the Cabinet’s decision to grant the two government guarantees, the ‘time gap’ had the effect of negating the mental element of corruption. The CA held that under s 23 of the MACC Act the receipt of gratification is not a necessary element of the offence.

[122] … If the law were to require close proximity in time between the time the impugned decision or action was taken and the time when the gratification was actually received, potential offenders could escape culpability by arranging the actual receipt of gratification at a much later date. If such proximal nexus in time were to be imposed, it would defeat the legislative intent in enacting section 23(1) of the MACC Act which was to root out unscrupulous public officers who abused their office or position for gratification.

[123] By the very wording and language of section 23(1) of the MACC Act reading together with section 23(2) of the same Act, we are of the view that the offence under section 23 of the MACC Act (offence of using office or position for gratification) is complete once the accused took any decisions or actions in which the accused has an interest. The receipt of gratification is not an element of the offence and it is unnecessary for the prosecution to prove the same.

 

Rejection of Appellant’s defence that his intervention  was not required because MOF had agreed to provide security for the KWAP loans

The CA rejected this argument as there was no evidence that the Ministry of Finance had agreed in principle to provide security for the KWAP loans. In any event, it was held that only the Cabinet could agree to provide any government guarantee under s 2(2) of the Loans Guarantee (Bodies Corporate) Act 1965, though the instrument of guarantee had to be signed by the Finance Minister.

 

Rejection of duplicity of charges defence

The complaint was that there were two Cabinet meetings, one in 2011 and the other in 2012. Therefore, it was wrong to have combined two separate charges into a single charge and the Appellant was prejudiced. This argument was rejected in that the two Cabinet meetings specified in the charge are a series of connected acts and they form the same transaction within the meaning of s 165(1) of the Criminal Procedure Code.

[134] …the involvement of the appellant in this criminal enterprise can be seen right from the incorporation of SRC, to the approvals of KWAP loans, which were secured by the government guarantees, in which the appellant was involved in the approval, right up to the time a part of the SRC funds amounting to RM42 million were deposited into the appellant’s personal bank accounts for his personal interest and benefit. The evidence clearly shows a series of events which ultimately form the narrative of a single transaction. The appellant’s decisions and actions with regards to SRC were done over a period of time by continuous acts and inter-connected events, primarily for his own personal benefit. The motivation to participate in the Cabinet meetings and approve the government guarantees is to create access to SRC’s funds, including the RM42 million that ultimately entered the appellant’s personal accounts. Hence, we find that the mention of the two Cabinet decisions in the single charge under section 23(1) MACC Act does not offend the rule against duplicity of charges. There are no two offences in the section 23(1) MACC Act charge. There is only one charge with a long time span as the transaction was a rather long one. Hence, we find that there is no duplicity or misjoinder of charges.

 

Rejection of national interest defence

The reliance by the Appellant on the testimony of the former Attorney General (Tan Sri Apandi Ali), the former MACC Chief Commissioner (Tan Sri Dzulkifli Ahmad) and the former Treasury Secretary General (Tan Sri Mohd Irwan) that all his actions in relation to SRC were for national interest was rejected. In this respect, the CA held that the opinion of any person is not relevant in Court proceedings as the Court forms its own opinion based on admissible evidence and neither were the testimony of witnesses ‘expert evidence’ which a Court may properly take into consideration.

[141] The appellant was actively involved in ensuring that the KWAP loans were disbursed to SRC. However, after the funds had been disbursed, the appellant became indifferent to the whereabout of the funds, and did not inquire from SRC as to what had happened to the funds, nor how it was utilized and for what purpose. He even instructed the second Finance Minister then to keep off SRC. This conduct of the appellant can be indicative of only one thing, and that is, once the funds had been secured by SRC, over which the appellant had overarching control, he was free to utilize them for his personal benefit. This is manifested by the flow of the RM42 million from SRC into his personal accounts. This is definitely not something that can be said to have been done in the national interest. There is no national interest here, just national embarrassment…

 

[289] The learned trial judge then evaluated all the strands of evidence, both direct and circumstantial, and found that it does not support the appellant’s contention that what he did was in the national interest. The appellant’s fingerprint can be seen from the time of SRC’s formation, the SRC loan application to KWAP, the appellant’s intervention in the loan application, the appellant’s influence in the approval of the government guarantees, the rushed disbursement of the loan of RM4 billion, the immediate transfer of the funds out of jurisdiction, the non-existent investments, and the brazenness in which attempts to find out and recoup the funds were dismissed by the appellant. The appellant has since shown a total lack of interest in the usage of the RM4 billion. If indeed SRC was established for national interest purposes and the loans were granted to make strategic investments in the energy sector, then why the bullet drawdown of the loans when no such investments had been identified, and there was no need to make the drawdown and incur interest payments. It must be noted that the instructions for the bullet drawdown came from the appellant himself.

[290] The evidence as a whole negate the appellant’s contention that he was motivated by national interest and not personal gain when he participated in the Cabinet meetings that approved the two government guarantees…

 

THE CHARGES UNDER THE PENAL CODE (‘PC’)

The three charges were under s 409 of the PC — criminal breach of trust (‘CBT’) by a public servant or agent.  The CA held that the learned trial Judge was correct in his conclusion that  the Appellant was (a) a public servant or agent; (b) entrusted with property or dominion over property; and (c) had dishonestly misappropriated or converted it to his own use.

 

Rejection of defence that the Appellant had no dominion over SRC’s property and activities

In the HC, the learned trial Judge found that the Appellant had overarching control over the affairs of SRC through his entrenched powers in the articles of association of SRC and his position as Advisor Emeritus. The latter position enabled him to make or influence decisions on strategic and important matters affecting SRC.  On the evidence, the CA agreed with the findings of the learned trial Judge.

[198] We agree with the learned judge’s finding that the appellant’s control and dominion over all activities of SRC were both total and complete. This governance structure made possible the overarching control that the appellant had over SRC. The ultimate shareholder of SRC is the Government of Malaysia, of which the appellant was at the material time the executive head. The appellant who was also the Finance Minister at the time, was by operation of law MOF Inc., and thus the acts of MOF Inc. were the acts of the appellant. The appellant was wearing many hats, and these positions vis-à-vis the company gave him ultimate and overarching control over SRC. In this unique corporate governance structure of SRC, it cannot be denied that the true control and ultimate power vested in the appellant and no other. Thus, we concur with the learned judge’s conclusion that the “law would therefore consider the appellant to have been entrusted with full dominion over SRC including its property, even from its establishment”…

[203] … the appellant had overarching control of the company through entrenched powers in the M&A to hire and fire the directors (as the Prime Minister), the exercise of which by the appellant is apparent from the various directions involving Nik Faisal had shown, coupled with the appellant’s directions to the directors through the various shareholder minutes (as the Finance Minister), and the advice on strategic and important matters which must be sought by the directors from the appellant (as the Advisor Emeritus).

 

Agency capacity of the Appellant

Appellant was a shadow director of SRC

As to the term ‘agent’, s 402A of the Penal Code provides for a  broad definition and it  includes any person occupying the position of a director, by whatever name called, and includes a person who acts or issues directions or instructions in a manner in which the directors of a company are accustomed to issue or act, notwithstanding any defect in the appointment or qualification of such person. The CA rejected the argument that the definition of ‘director’ refers ‘to only persons who hold some position in the company and upon whose directions or instructions the directors of the company are accustomed to act’. The CA also held that there was ample evidence that the board of SRC had acted in accordance with the directions or instructions of the Appellant.

[157] We find that the interpretation of the word “director” as urged upon by the appellant would lead to absurdity. Such a restrictive interpretation would mean that an “outsider” who is the actual directing mind and alter ego of the company, who is lurking in the shadow and instructing the directors of the company in the manner in which the directors are accustomed to act would not be caught by that restrictive interpretation. Such an interpretation would exclude de facto or shadow directors from the ambit of definition of ‘director’ in section 402A PC, despite the patently inclusive provision…

[173] The learned trial judge had also correctly found that the totality of the evidence adduced showed that the appellant was indeed a shadow director of SRC, and hence, a director within the meaning of section 402A PC. The evidence showed that the directors of SRC at the material time were appointed by the appellant as stated in his letter dated 1 August 2011. These were the de jure directors who were validly appointed to SRC’s Board of Directors. Pursuant to Article 67 of SRC’s Articles of Association, the appellant, as the then Prime Minister, was the only person who can appoint and remove any director of SRC which meant that the appellant held the authority to hire and fire the de jure directors.

[174] There is also evidence showing the appellant having issued shareholder instructions which the directors of SRC had to follow, not merely as shareholder’s instructions, but instructions issued by the Prime Minister who appointed those directors to office. Additionally, there is ample evidence showing that the directors had in fact followed the appellant’s instructions and acted in accordance with them. There is no evidence to show the directors had disregarded or defied the appellant’s instructions.

 

Additionally, apart from being an agent by virtue of shadow directorship, the learned trial Judge correctly held that the Appellant was also an agent by virtue of the words in section 402A that reads “acting for the company ... in any other capacity either alone or jointly with any other person and whether in his own name or in the name of his principal or not” and this arose from the Appellant’s position as Prime Minister, Finance Minister and Advisor Emeritus of SRC.

[179] We agree entirely with the … ­analysis and findings of the learned trial judge. Evidence adduced showed that the appellant arranged the affairs of SRC, whereby he was entrusted with its assets and properties. This is evident after his appointment as Prime Minister, where by virtue of that position he issued shareholder’s instructions that had to be complied by the SRC Board. The appellant’s role was formalized when he became Advisor Emeritus, by authorizing an amendment to the Articles of Association that allowed for the creation of that position. This appointment entrenched the appellant’s commanding position in SRC, which further enabled him to direct the SRC Board and act according to his command.

 

Rejection of defence that the RM42 million are not the funds of SRC

The CA held that the prosecution had established by cogent evidence that the RM42 million in the three charges belonged to SRC, which had been discussed at length by the learned trial Judge.

[214] The evidence clearly shows that the RM42 million belonged to SRC. The money trail clearly records that the said RM42 million originated from SRC’s AmIslamic Bank account and transited through the bank accounts of GMSB and IPSB before being deposited into the appellant’s personal bank accounts…

[216] The evidence trail clearly establishes the funds flowing from SRC, through intermediary companies that had no legal right to receive the funds, and ending up in the appellant’s two personal accounts from which the funds were utilized by the appellant. The fact that the funds flowed through these intermediary companies do not necessarily mean that SRC no longer has a proprietary interest in these funds, nor does it mean that the funds do not belong to SRC. Evidence has established that the flow of these funds, i.e. the RM42 million, through the intermediary companies, namely GMSB and IPSB, was for the purposes of layering the transaction and disguising the flow of funds such that it is made more difficult to track the funds’ nexus to SRC and avoid detection by the authorities. The funds remain that of SRC despite flowing through these two companies.

 

There was misappropriation in that there was wrongful gain and wrongful loss of RM42 million

An act of misappropriation is dishonest if the intention is to cause wrongful loss or wrongful gain. Section 23 of the Penal Code provides the definition:

 

23 “Wrongful gain” and “wrongful loss”

 

“Wrongful gain” is gain by unlawful means of property to which the person gaining is not legally entitled.

 

“Wrongful loss” is the loss by unlawful means of property to which the person losing it is legally entitled.  

 

A person is said to gain wrongfully when such person retains wrongfully, as well as when such person acquires wrongfully. A person is said to lose wrongfully when such person is wrongfully kept out of any property, as well as when such person is wrongfully deprived of property.  

 

The CA rejected the arguments that the element of misappropriation was not made out because the RM42 million of SRC funds were disbursed out by 16 scanned copies of instruction letters.

 

[231] We concur with the findings of the learned trial judge that whether the signatures on the instructions were actual or digital; or whether they were scanned or electronic, it does not make any difference. In banking practice, scanned or electronic instructions bearing photocopied or digitised signatures of an authorized signatory is generally accepted, as confirmed by PW54. In this regard, we agree with submissions of learned counsel for the Respondent that the bank can act on scanned or electronic instruction as long as the signatories agree to the transfer and for their sample signature to be used, and so long as all other requirements imposed by the bank in respect of such instructions are fulfilled.

[232] There is no dispute on the several SRC electronic transfer instructions to AmIslamic Bank as the bank is authorized to act on scanned signatures. This is further confirmed by the testimony of the Chairman of SRC’s Board (PW39) where he stated that SRC had resolved via a Directors Circular Resolution (DCR) dated 23.8.2011 (Exhibit D519) to allow for the use of electronic copies of instruction letters to transact funds with AmIslamic Bank, and AmIslamic Bank was mandated to act as such upon these electronic instructions. PW39 confirmed that based on the DCR, SRC was authorized to instruct AmIslamic Bank via e-mail or other electronic means as regards transfer of funds from SRC’s accounts.

[233] Additionally, it must be noted that in the present case, though the appellant has raised the issue of the validity of the electronically transmitted scanned instructions at trial, at no time did SRC, as the account holder itself, dispute the said instructions with AmIslamic Bank. And importantly, in accordance with usual practice, AmIslamic Bank had confirmed the scanned electronic instructions with officers of SRC, as well as GMSB, with their respective finance officers, before acting on them. All transactions were acted upon by AmBank without any complaint as to the legitimacy of the instruction letters from SRC or GMSB. In this respect, there is also no evidence of any wrongful crediting or debiting of the accounts of SRC or GMSB by AmIslamic Bank as a result of the use of the cut and paste signatures of the authorized signatories. SRC and GMSB being the customer/account holder had not complained of any wrongful transfer of the funds from their accounts. There was never any dispute between SRC nor GMSB, as customer, and AmIslamic Bank, as banker, in respect of AmIslamic Bank acting on the scanned instruction letters. This subsequent conduct of SRC/GMSB and AmIslamic Bank after the transfers had been made pursuant to the customers’ scanned electronic instructions would be a relevant consideration pursuant to section 8 of the Evidence Act 1950.

 

Rejection of the CSR defence

The CA held that the evidence did not support this assertion.

[246] The evidence however does not support this assertion, and the learned trial judge rejected this defence. The appellant was never an authorized person to carry out CSR programs for SRC, GMSB or IPSB, and the actual usage of the funds by the appellant belies this defence. The expenditures were for the personal benefit of the appellant, directly and indirectly, and in some cases for political purposes connected to and calculated to advance the appellant’s political career. In any event, the reason or purpose of expenditure after dishonest misappropriation are not relevant to a CBT charge.

 

Rejection of the Arab donation defence

The CA agreed with the finding of the learned trial Judge that the funds in the Appellant’s personal accounts were donations from the Saudi Royal Family ‘was unbelievable when weighed against the totality of evidence’. Prince Saud Abdulaziz  Al-Saud who purportedly wrote the “Arab letters” on behalf of the King of Saudi Arabia was not called to give evidence as the maker of the “Arab letters”,  their authenticity was not established at trial and were inadmissible hearsay evidence.  The “Arab letters” were marked as exhibits by agreement between the prosecution and the defence only for the purpose of showing that the same were given to ­AmIslamic Bank when queried as to the source of funds entering the Appellant’s accounts and ‘nothing more’.

[250] We too found this “Arab donation” defence untenable for the same reasons as that found by the learned trial judge. Firstly, the evidence clearly shows that funds originated from SRC and ended in the personal accounts of the appellant. Now, if they were personal donations from the Saudi monarch to the appellant, then there is no reason for it to be deposited into SRC’s account. SRC is a Government linked company owned by MOF Inc. Secondly, the alleged bulk of the Arab donation entered and left the appellant’s account sometime in 2013, well before the RM42 million came from SRC to the appellant’s bank accounts. Thirdly, the alleged second tranche of a series of an alleged Arab donation in 2014 amounted in total to about RM49 million only (including RM5 million which had nothing to do with the alleged Arab donation), which had been used up except for about RM6 million, before the arrival of the RM42 million into the appellant’s bank account from SRC. Evidence had shown that from the later period of 2014 until early 2015, some RM136 million was utilized by the appellant despite his belief that only RM49 million came pursuant to the alleged fourth Arab letter (D604). Hence, we agree with the learned Deputy’s contention that the circumstances surrounding the fourth Arab letter clearly shows that it is a fabrication and that the appellant could not honestly belief that the RM49 million is from the Saudi monarch. In fact the utilization of funds by the appellant in his account during the pertinent period of the later part of 2014 and early 2015 was more than triple that amount. Hence, the defence contention that the appellant honestly believed the funds were part of the Saudi monarch’s donation is not borne out by the hard evidence before the court. In short, the evidence does not support the appellant’s contention or belief that the source of the RM42 million was the “Arab donation”. Therefore, the defence contention that the appellant had an honest belief that he was entitled to deal with the funds in question is unsustainable. In the overall, we find that there is ample evidence that the appellant was entrusted with dominion over the RM42 million in his capacity as agent with a specific purpose relating to strategic investments but instead the funds were used by the appellant for his own purpose…

 

Rejection of Appellant’s defence that he had no knowledge of how the funds entered into his personal accounts

The learned trial Judge found that there was ‘overwhelming evidence’ which strongly militates against the Appellant’s assertion of no knowledge.  In this respect, the Appellant did not really challenge that monies were indeed deposited into his personal accounts, or dispute that he had subsequently used the money. The CA accepted the findings of the learned trial Judge, quoting certain passages from the judgment of the learned trial Judge, which included:

 

“The argument that the accused did not know the balances in his accounts as he did not manage his own accounts lacks substance because the persons whom the accused had tasked with that responsibility, namely Nik Faisal and Datuk Azlin must have had communicated with and apprised the accused of the balances and sources of funds to enable the accused to continue issuing the many and various cheques that ran into hundreds of millions in RM. The person whom the accused did not identify as one who helped manage his accounts, namely Jho Low in fact has been shown in the BBM messages (P578) and confirmed in the testimony of PW54 to have had been in active contact with the accused on matters pertaining to the details of balances and management of his accounts.

And in any event, I have earlier set out in some detail the overwhelming evidence which strongly militate against this stance of the accused on lack of knowledge. On the contrary, the evidence shows both that the accused had full knowledge, given his affi­davit admission as well as that by the process of inference, he must have known that the RM42 million from SRC were deposited into his personal accounts.”

 

Appellant abandoned his defence that Jho Low had manipulated his accounts

This defence was raised during the prosecution case and was dealt with by the learned trial Judge, who had rightly rejected this aspect of the case. The CA noted that this defence was subsequently abandoned, throwing doubt on the credibility of the defence.

[252] The defence had during the prosecution case advanced the defence theory and case that Jho Low had manipulated his bank accounts and thereby caused RM42 million to flow into his accounts with his concurrence and knowledge. Hence, it was the appellant’s case that he had been framed by Jho Low and purportedly by the bankers to make it appear that he had indeed committed the CBT offences. However, this defence was later abandoned, thus casting aspersion on the credibility of the defence. This became manifest when the appellant readily admitted that it was he who had instructed Jho Low together with the late Dato Alin Alias and Nik Faisal to ensure that there would be adequate funds available in his accounts for him to draw on, which he did by issuing countless cheques running into millions of Ringgit. Hence, it is evident that Jho Low and his associates were the appellant’s minions.

 

THE 3 CHARGES UNDER the AMLA ACT

The CA considered whether the learned trial Judge was right in concluding whether the three elements comprised in the activity of the offence of money laundering were established on the evidence — (a) the accused had received the monies stipulated in the charge; (b) the monies received are the proceeds of an unlawful activity; and (c) the mental element of the crime or the presence of knowledge with respect to the source of the proceeds. The CA upheld that the findings of the learned trial Judge that the evidence showed that the Appellant did receive the monies and it arose out of unlawful activities and that the Appellant’s claim of honest belief that the funds that entered into his personal accounts were from the Arab donations could not be accepted.  In this regard, the CA rejected the argument that ‘the doctrine of wilful blindness does not apply as there were justifiable grounds for the Appellant not taking steps to ascertain the provenance of the RM42 million’.

[364] In the overall, the learned trial judge rejected the appellant’s contention and said “any assertion that the circumstances prevailing provided no cause for suspicion to arise and the accused reasonably did not have cause to enquire into any particular transaction during the material period is absolutely perverse given the wealth of evidence to the contrary”.

[365] We find that the learned trial judge’s conclusion that there was cause for suspicion and that there was a concomitant duty on the appellant to make reasonable enquiry into the transactions resulting in the flow of the RM42 million into his personal accounts [is] well supported by evidence…

[367] Now, when that legal principle is applied, we agree with the learned trial judge that the evidence overwhelmingly shows that the appellant as the account holder of the two accounts into which the RM42 million flowed had not been vigilant or taken measures to ensure that the funds received in his account were not proceeds of any unlawful activity and that he knows that the source of those funds is lawful. The appellant did not take any proactive steps in this regard. As such, we do not find any error on the part of the learned trial judge when he concluded as follows:

[2696] I do not think that given the facts and evidence as stated, as the account holder the accused in the instant case before me could be said to have been vigilant and taken steps to ensure that the RM42 million received in his accounts are not proceeds of any unlawful activity and that he knows that the source of those monies is lawful. The circumstances which in this case so patently aroused suspicions in an overwhelming fashion lead only to the irresistible conclusion that the accused deliberately chose not to question and probe substantive questions that plainly required verification, so that he could deny knowledge.

[2697] This is wilful blindness. And the law treats this as knowledge. In any event, the mens rea or the mental element of the offence under s. 4(1) is specified in s. 4(2) which has been satisfied. The only other plausible explanation is that the accused actually knew from day one that the whole King Abdullah donation narrative was an elaborately orchestrated invention intended to subvert the truth and was totally devoid of merit.

[368] The doctrine of wilful blindness will be applicable only if there has arisen reasonable cause of suspicion, and the accused does not take any step to investigate further and dispel the suspicion. Here, the facts and evidence show that the funds could not have originated from the Saudi King. The reason for that finding is well set out in the lengthy analysis of evidence by the learned trial judge. Nevertheless, the appellant did not take any steps to investigate the flow of funds into his accounts. He seems to have placed reliance on what Jho Low had told him as to the source of the funds and nothing else. He was the sitting Prime Minister at the material time and he had every opportunity, including official government channels, to make enquiries and confirm if indeed the funds came from the Saudi monarch. Not a single step was taken by the appellant to ascertain or verify the truth of the source as intimated to him by Jho Low, allegedly. This is classic wilful blindness…

 

The CA also rejected the Arab donation story in the AMLA charges.

[276]    The Arab donation story once again reared its head in regards the mens rea of the appellant for the AMLA offence. This was once again dealt very clinically by the learned trial judge. This tale that surpassed even those from the Arabian Nights, not only lacked credibility, but was contradicted and dispelled by the documentary evidence…

 

APPEAL ON SENTENCE

The CA did not find any error in the application of the sentencing principles and held that the learned trial Judge had given adequate consideration to the materials that were before him.

[395] …We find that there is proper consideration by the learned trial judge of all factors that are relevant to be taken into consideration in sentencing. In the circumstances of the facts of the case, we do not find the sentences to be grossly excessive. The terms of imprisonment and fine imposed are wholly adequate and commensurate with the nature of the offences. Under the circumstances, we find that the learned trial judge had exercised his judicial discretion appropriately and well within accepted judicial principles on sentencing…

[397] And in circumstances such as this, when a prominent political leader of the land is arraigned before the court, convicted and sentenced, we find it would be most appropriate for us to be reminded of the immortal words of Raja Azlan Shah FJ (as HRH then was) as trial judge in Public Prosecutor v Datuk Haji Harun Bin Haji Idris (No 2) [1977] 1 MLJ 15, where after having found the accused, who was then a sitting Menteri Besar of Selangor and a political heavyweight of the time, guilty on three counts of corruption, said these immortal words before sentencing him to a term of imprisonment. It would do us well to be reminded of those words:

“It is painful for me to have to sentence a man I know. I wish it were the duty of some other judge to perform that task.

     I believe the very extensive coverage of this hearing in the press has permeated all levels of our society. To me this hearing seems to re-affirm the vitality of the rule of law. But to many of us, this hearing also suggests a frightening decay in the integrity of some of our leaders.

      It has given horrible illustrations of Lord Acton’s aphorism “power tends to corrupt, and absolute power corrupts absolutely”, and has focused concern on the need of some avowed limitations upon political authority…”

 

[398] And some 45 years later these words still bear relevance to the appellant, and where we as a nation find ourselves at now. The “frightening decay in the integrity of some of our leaders” that Raja Azlan Shah AgLP (as HRH then was) warned us of 45 years ago is still a scourge that plagues this beautiful nation. The courts in upholding the rule of law would have to do what is necessary to ensure that this modern day plague is eradicated for the good of the nation. The law is indeed “no respecter of persons”. All men are equal before the law, and the courts apply the law equally to all.

 

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