Najib Razak was convicted in the first trial related to fraud
Malaysia’s former prime minister Najib Razak has been found guilty of all seven charges in his first trial linked to the multibillion-dollar 1MDB scandal – a landmark conviction that could lead to decades in jail.
Najib has denied any wrongdoing in relation to what is one of the world’s biggest financial frauds, in which billions of dollars were allegedly looted from a state fund set up to promote development. The scandal shook Malaysian politics, led to the ousting of Najib’s Umno party after 61 years in power, and prompted a series of investigations in countries around the world.
Less than two years after being removed from government, Umno returned to power again in March, through an alliance led by the prime minister, Muhyiddin Yassin. Some questioned whether this change in leadership would have ramifications for ongoing corruption cases.
On Tuesday morning, Kuala Lumpur High Court judge Mohamad Nazlan Mohamad Ghazali said: “After considering all evidence in this trial, I find that the prosecution has successfully proven its case beyond a reasonable doubt.”
Najib arrived at court wearing a face mask, while groups of his supporters who gathered at the court were told to social distance.
He has vowed to appeal, and in a statement posted on Facebook late on Monday, said that he was prepared to fight to the end. “From day one, I have said this is the chance for me to clear my name,” he wrote. “Whatever the decision in the High Court tomorrow, it does not end here … after this, we will go to the Court of Appeal. I am ready.”
In total, Najib faces five separate trials linked to the scandal. Tuesday’s verdict relates to seven charges over the transfer of 42m ringgit ($9.9m) from former 1MDB unit SRC International into Najib’s bank accounts through intermediary companies. He could face hefty fines and up to 20 years in jail for each charge.
During the trial, the court heard of Najib’s lavish spending sprees, including how, on one occasion, he spent $800,000 at a jeweller in Italy in a single day and, months later, $108,000 at a Chanel boutique in Hawaii.
Najib defended the credit card spending as purchases for official purposes. He had pleaded not guilty to criminal breach of trust, money laundering and abuse of power.
Najib testified that he was misled by Malaysian financier Jho Low and other 1MDB officials into believing the funds were donated by the Saudi royal family and not misappropriated from SRC, as prosecutors allege. Saudi Arabia’s foreign minister said in 2016 the funds were “a genuine donation”, but the government has not commented on the case since.
Speaking to the Guardian before the verdict, Bridget Welsh, an honorary research fellow at the University of Nottingham Malaysia’s Asia research institute, said: “People will be watching carefully because they know that Malaysia’s reputation was damaged by 1MDB, and I think they are looking to this case to hope that this is going to restore Malaysia’s reputation.”
A not guilty verdict would have been seen as “a miscarriage of justice on the part of many Malaysians,” said Welsh, but she added that the political situation in Malaysia is polarised, and that attitudes towards the verdict would reflect this.
The judgment also has major implications for the country’s leadership. A not-guilty verdict could have paved the way for Najib to run again for office. The conviction, however, could weaken Muhyiddin’s coalition, who depends on Umno for support.
Najib will be able to appeal against the verdict, however, and the terms of the sentencing may allow Najib to continue to play a role in politics from behind the scenes. “He may not be able to run for office, but he will still have power within the political party,” said Welsh.
Muhyiddin has said he will introduce anti-corruption reforms. A recent decision to drop charges against Najib’s stepson, Riza Aziz, the producer behind The Wolf of Wall Street, in a settlement deal, has been criticised by activists.
In total, the US justice department believes more than $4.5bn was stolen from the 1MDB fund and laundered by Najib’s associates. More than $700m from the fund allegedly landed in Najib’s bank accounts. Najib’s wife and several officials from his party and previous government have also been charged with graft.
Last week, Goldman Sachs reached a $3.9bn settlement, in return for Malaysia dropping criminal charges against the investment bank over its role in helping 1MDB sell $6.5bn in bonds.