This article first appeared in The Edge Malaysia Weekly on November 4, 2024 - November 10, 2024

COME Dec 2, Datuk Seri Najib Razak will have the opportunity to explain his actions as he elected to testify under oath from the witness stand after the High Court ruled last week that there is a prima facie case against the former prime minister on four abuse of power and 21 money laundering charges involving 1Malaysia Development Bhd’s (1MDB) RM2.27 billion funds.

As such, Najib can be subject to cross-examination by the prosecution and the weight of that evidence would be more compared to if he had elected to give an unsworn statement from the accused’s dock or to remain silent.

Najib, the former Umno president and Barisan Nasional chairman, had also testified from the witness stand in the seven charges of criminal breach of trust, money laundering and abuse of power in RM42 million of funds belonging to SRC International Sdn Bhd — a wholly-owned subsidiary of 1MDB — for which he is now serving time in jail at the Kajang prison after he was found guilty of all charges.

In his judgement last week, trial judge Datuk Collin Lawrence Sequerah raised numerous points which Najib will have to rebut if he is to cast doubt on the prosecution’s case.

These include Najib’s active involvement and facilitation of 1MDB’s establishment and subsequent deals which were a clear indication of his vested interest, not to mention his brushing off of attempts to alert him to the massive transgressions taking place in the state-owned strategic development company, and dismissal of key members of an investigation task force into 1MDB’s deals.

Najib’s insouciance — or “wilful blindness” as the judge described it — in ascertaining the source of billions of ringgit deposited into his personal banking accounts was yet another finding, as was his lack of attempt to get to the bottom of the matter, for instance not making a police report.

And, notably, Sequerah emphasised that ultimately none of 1MDB’s deals had benefited the country.

Sequerah in his 41-page summary judgment, which him took almost two hours to read, questioned 1MDB’s various endeavours with PetroSaudi International (PSI), the acquisition of Tanjong Energy and Mastika Lagenda independent power plants and other investments over a six-year period that required substantial funding and government backing.

The judge indicated that this was possible due to Najib’s influential multi-positions as 1MDB chairman of the board of advisors (BOA), the then finance minister and prime minister, where any proposed investment project would have to go through him first as the sole shareholder of 1MDB, given its ownership by the Minister of Finance Inc.

Najib was instrumental in the cabinet’s approval of a government guarantee for RM5 billion of Islamic bonds issued by AmBank to 1MDB’s precursor Terengganu Investment Authority in 2009.

“The evidence adduced show that without Najib’s involvement as finance minister and as PM in certain key actions, the JV with PSI would not have taken off. In addition to his role as the PM, MOF, sole shareholder and chairman of BOA, the accused had a definite interest in the events leading up to the formation of the JV and beyond,” Sequerah said.

The PSI JV in 2009, constituted Najib’s first abuse of power charge.

Another abuse of power charge centred on the acquisition of the Tanjong Energy and Mastika Lagenda IPPs, where a US$1.75 billion bond issued by Bank of New York Mellon to 1MDB Energy (Langat) Ltd’s bank account on Oct 19, 2012, exhibited a similar trend.

The prosecution, the judge said, showed evidence the acquisition would not have materialised without Najib’s action in signing the 1MDB minutes of representatives (MR) and Special Rights Redeemable Preference Shareholder Resolution in Writing (SRRPS), issued in his capacity as a holder of special rights on Aug 10, 2012 for the acquisition sum of RM2.75 billion.

Sequerah noted the money trail from the bond issuance had been traced by Bank Negara Malaysia analyst, Adam Ariff Mohd Roslan, to the bond issue, and that RM90.899 million meant for the two acquisitions had ended up in Najib’s Ambank 9694 account.

On the third abuse of power charge, 1MDB’s joint venture with Aabar PJS Ltd in March 2013 had raised US$3 billion in bonds for the development of the Tun Razak Exchange (TRX) wherein Najib had signed a letter of support.

Sequerah observed the swiftness in the fundraising and again the money trail from the raising of bonds had led to Najib’s account. “(However) it was Najib who had taken action in various capacities, namely, at the 1MDB stage as sole shareholder, the MOF stage and at the cabinet stage. He was therefore the ultimate decision-maker.”

The option buyback stage in 2014 — prior to the proposed listing of 1MDB’s energy assets — constitutes the last abuse of power charge, where 1MDB wanted to redeem Aabar’s 49% stake in 1MDB Energy Sdn Bhd under 1MDB Energy Limited (1MEL) and also 49% in 1MDB Energy (Langat) Sdn Bhd under 1MDB Energy (Langat) Limited (1MELL).

A sum of US$250 million and US$975 million were raised from Deutsche Bank, which Sequerah pointed out would not have occurred if Najib had not signed the letter of approval and support.

“A consideration of all the evidence above showed that the accused had taken such action in matters in which he had an interest which were the basic facts necessary to trigger the presumption under Section 23 MACC Act over the abuse of power charges,” the judge said, adding in the fourth stage, a sum of RM44.570 million was traceable from the two loans.

On the defence’s contention that Najib’s actions were for the country’s benefit, Sequerah emphasised that there had been no benefit to the Malaysian government and no interest or advantage had accrued to the country. However, money funnelled to Umno and other Barisan Nasional parties had indirectly benefited Najib.

Although the judge did not directly use the expression “criminal mind”, he alluded to the PM’s actions and inactions resulting in Najib’s defence being called.

Sequerah said despite defence allegations of the involvement of others in the 1MDB decision-making process, it was proven Najib had taken action in various capacities.

“Najib was therefore the ultimate decision-maker. He had also not seen fit to lodge any police reports in respect of the alleged involvement of others. Despite the fact that by 2015, the publicity about the financial scandal involving 1MDB surfaced, Amhari (Najib’s aide Datuk Amhari Efendi Nazaruddin) said that he received no instructions from Najib to lodge any reports with the authorities.”

The court also pointed to The Edge Media Group chairman’s March 6, 2015 meeting with Najib at the latter’s Langgak Duta home, where Tan Sri Tong Kooi Ong had walked Najib through the mechanics of how in 2009, US$700 million of 1MDB’s funds had gone into the bank account of Good Star Ltd — a company controlled by businessman Low Taek Jho. Tong had urged Najib to take action against Low, whereupon Najib showed Tong the door.

Najib’s removal of attorney-general Tan Sri Abdul Gani Patail and replacement with Tan Sri Mohamed Apandi Ali — a former Umno Youth division chief — and removal of MACC chief commissioner Tan Sri Abu Kassim Mohamad were noted by the court, as was the disbandment in 2015 of the special task force formed in 2014 to look into 1MDB and its dubious transactions.

“There was evidence that Najib had taken steps to cause Abu Kassim’s removal while Apandi, who replaced Gani, had closed the case. Sometime in July 2015, Najib instructed then Bank Negara governor (Tan Sri Zeti Akhtar Aziz) to release a statement stating there were no wrongdoings involving the monies credited to his accounts. However, Zeti refused,” the judge said.

Sequerah also said Najib instructed KPMG auditors to complete and sign off 1MDB’s financial statement audit for 2013, although the audit firm had yet to receive vital documents over its questionable Brazen Sky investments.

“KPMG’s former managing director, Datuk Johan Idris, described Najib’s instruction as a form of intimidation. Notwithstanding, KPMG was still unable to sign off the accounts as they were still lacking documents from 1MDB.

“As a result, on December 31, 2013, Najib terminated KPMG as the auditor for 1MDB with immediate effect, and replaced it with Deloitte KassimChan,” Sequerah said, adding that then second finance minister Datuk Seri Ahmad Husni Hanadzlah cautioned Najib over the 1MDB-PSI joint venture, he was told to stay out of 1MDB affairs.

Moreover, secretly taped recordings, the judge said, also showed Najib’s attempts to cover up 1MDB issues with the help of other individuals.

In facing 21 money laundering charges, where nine were that of receiving, five using and seven transferring proceeds of unlawful activity, the judge found Najib was intentionally blind on these transactions.

Sequerah accepted the above funds were proceeds from unlawful activity from the money trail shown by the police and Bank Negara in Najib receiving, using and transferring the money and the court could justifiable infer Najib’s knowledge with regards to money laundering.

“Under all the circumstances, I find that the accused was also ‘wilfully blind’ with regard to his failure to inquire into the origin of these funds when the circumstances were such that he ought to have done so. I find that the prosecution had also proven the mens rea (wrongful knowledge) in respect of all the money laundering charges,” he declared, debunking the defence’s argument that the funds were donations from Saudi royalty.

On Oct 23, a week before Sequerah’s judgment, Najib tendered an open apology to all Malaysians over the 1MDB debacle that happened under his watch. Come Dec 2, he is expected to explain in court why this happened and why in his own words he should not pay the price.

This would be the third time that he takes the witness stand as he recently testified at another High Court in relation to a civil suit taken by SRC International against him over a US$1.18 billion loan extended by Retirement Fund Inc (KWAP).

Najib’s lead counsel Tan Sri Muhammad Shafee Abdullah indicated that another 11 witnesses would be called to testify in his defence. Already the 1MDB trial has spanned six years or a total 247 days, with 50 witnesses called by the prosecution.

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