Former Prime Minister found guilty . . .
Malaysia’s former Prime Minister Najib Razak was found guilty Tuesday on seven charges including abuse of power, criminal breach of trust, and money laundering, in the country’s largest financial fraud scandal in which more than C$6 billion was stolen from the state fund 1Malaysia Development Berhad (1MDB) between 2009 and 2012. Najib was sentenced to 12 years in prison and fined C$66 million. In his ruling, the judge said that the former PM could not provide a credible explanation for more than C$900 million appearing in his personal bank accounts. The judge also added that Najib showed no urgency in recovering any of the funds once the theft was discovered in 2015. Najib maintains his innocence and will appeal the verdict, a process that will likely take a year.
International dimensions . . .
While Najib tried to suppress Malaysian anti-corruption scrutiny into 1MDB in 2016, investigations and whistleblowers from the U.S., Switzerland, and Singapore helped uncover the scandal. Public outrage culminated in Najib’s ouster and a loss of seats for his UMNO party in the May 2018 general election. Najib’s close associate and alleged mastermind of the theft, financier Jho Low, has denied all accusations and remains at large. Goldman Sachs, the bank that helped raise over C$8 billion for the development fund, is also tainted by the scandal, with two of its former bankers facing charges of bribery and money laundering. The bank recently settled with the Malaysian government, promising a C$3.3 billion cash payout and a guarantee the government will receive C$1.8 billion in recovered assets. Goldman still faces charges in the U.S.
Court of public opinion remains divided . . .
The verdict was celebrated in Malaysia as a major victory for the rule of law, the independent judicial system, and the electorate that voted Najib out in 2018. But the disgraced PM’s supporters believe the charges and trial are politically motivated. Current Prime Minister Muhyiddin Yassin publicly endorsed the legal process against Najib, while also respecting Najib’s right to appeal. Najib remains an influential political figure, retaining UMNO membership and his parliamentary seat. With rumours circulating of a snap election before year’s end, Najib losing his seat would weaken the ruling coalition, which has a wafer-thin cabinet majority.
READ MORE
- The Edge Markets: SRC Trial: Najib sentenced to 12 years in jail, fined RM 210m
- The Guardian: 1MDB scandal: Najib Razak handed a 12-year jail sentence
- Malay Mail: Guilty verdict for Najib caps dramatic turn in fortunes
