Ex-Malaysian Leader’s First 1MDB Trial Begins
03 Apr 2019

After nearly two months of delays, the trial of Najib Razak is set to begin Wednesday on charges that the former Malaysian prime minister took part in a scheme to steal vast sums from a state fund he established a decade ago.

The trial, which marks a milestone in a sprawling financial scandal that became public as early as 2015, is expected to be one of several Najib will face over his alleged role in the misappropriation of approximately $4.5 billion from 1Malaysia Development Berhad (1MDB), which he founded in 2009.

Beginning Wednesday, prosecutors will seek to convict the former head of state on seven of a total 42 charges brought against him, including allegations of bribery, money laundering and criminal breach of trust. The case focuses on the misuse of funds held by SRC International Sdn Bhd, a subsidiary of 1MDB.

Najib, who lost a reelection bid in May after nearly a decade in power, has denied allegations that he took part in the scheme. Prosecutors first charged Najib in July with three counts of criminal breach of trust and one count of abusing his post at SRC, according to New Straits Times.

Allegations of criminality linked to 1MDB arose four years ago, after the ostensibly solvent state fund missed a loan payment of $550 million, according to The Wall Street Journal. The incident prompted Malaysian law enforcement officials to launch a special task force in March of that year to investigate whether 1MDB had served as a front for illicit activity.

Following media reports that nearly $700 million in 1MDB funds had ended up in Najib’s personal bank account, Switzerland’s attorney general opened a criminal investigation into the scandal that August.

Although Malaysia’s then-attorney general cleared Najib of wrongdoing, in part by claiming that the funds had been gifted to the prime minister by Saudi royalty, the US Justice Department filed a series of civil lawsuits in July 2016, accusing Najib of funneling $681 million from a 1MDB bond sale into his account.

Through a “global labyrinth of multi-layered financial transactions,” Najib and his co-conspirators laundered the money by investing it in a 300-foot yacht, high-end real estate, artwork, jewelry and the production of the film “The Wolf of Wall Street,” the department said.

According to Malaysia’s finance ministry, the state fund lost a total of $10 billion during Najib’s time in office.

Photo: Firdaus Latif

Read more:

Malaysian 1MDB scandal is ‘kleptocracy at its worst’

Malaysia’s Najib explains why he had so many luxury handbags, lots of cash, jewelry

Money laundering: Malaysia charges Goldman Sachs, ex-bankers over 1MDB scandal

You can claim CPD minutes for this content, by signing up to our CPD Wallet

One Response to “Ex-Malaysian Leader’s First 1MDB Trial Begins”
James Michaels

James Michaels April 3, 2019

1MDB is one of the worst examples of multi-layering of offshore companies to conceal the true beneficiaries moving dirty funds into the banking system. The Seychelles offshore sector was the centre of this kleptocratic scandal. Dozens of offshore companies were registered with the Seychelles Financial Services Authority ( Seychelles FSA ) by the offshore agent Offshore Incorporations Limited ( OIL ), which is a managed service of Mayfair Trust, as part of the 1MDB scam. This agent also set up companies in the BVI as part of the same job. In Seychelles, the law on offshore is the weakest in the world and those who set up offshore companies there know that they are not required to identify themselves to the FSA. All the FSA wants to do is derive revenue from high- volume company registration and doesn’t require knowledge of who the beneficial owner is. This vulnerability is the Achilles heel of the international financial system and has been used in Seychelles to bypass international sanctions against North Korea, Syria, Iran and terrorist financing as well as organised crime and kleptocracies. The EU, US Treasury and FATF need to sanction and blacklist Seychelles and other countries that do this!

You must be logged in to post a comment.

This site uses Akismet to reduce spam. Learn how your comment data is processed.