Malaysian ex-PM Najib to learn fate in first 1MDB trial

Kuala Lumpur (AFP) – A Malaysian court will hand down its verdict in Najib Razak’s first corruption trial on Tuesday, nearly 16 months after it began probing the former prime minister’s role in the multi-billion-dollar 1MDB scandal.

Najib and his inner circle are accused of plundering sovereign wealth fund 1Malaysia Development Berhad in a mind-boggling fraud that stretched around the world.

Stolen cash was allegedly used to bankroll Hollywood hit “The Wolf of Wall Street”, starring Leonardo DiCaprio, and US investment titan Goldman Sachs also became embroiled in the scandal.

Anger at the looting played a large part in the shock loss by Najib’s coalition in elections two years ago after six decades in power.

He was subsequently arrested and hit with dozens of charges over the fraud.

Najib is currently facing three separate, 1MDB-linked trials, and the first finally reaches its climax this week in the Kuala Lumpur High Court.

The case centres on the transfer of 42 million ringgit ($9.9 million) from former 1MDB unit SRC International into Najib’s bank accounts.

He denies any wrongdoing, and his lawyer Muhammad Shafee Abdullah told AFP ahead of the verdict: “I feel good about the defence.”

The ex-leader, who is facing four charges of corruption and three of money-laundering in the case, insists he was ignorant of the bank transfers.

His defence team has portrayed Najib as a victim and instead sought to paint financier Low Taek Jho, a key figure in the scandal who has been charged in the US and Malaysia, as the mastermind.

Low, whose whereabouts are unknown, maintains his innocence.

– Political turbulence –

Prosecutors insist Najib was in control of the 1MDB unit and that they have a solid case, but observers believe recent political upheaval could affect the outcome of the trial, which began in April last year.

Najib’s scandal-mired party returned to power in March as part of a coalition after a reformist administration collapsed.

Since then, 1MDB-linked charges were unexpectedly dropped against the ex-leader’s stepson Riza Aziz, one of the “Wolf of Wall Street” producers, in exchange for him agreeing to return assets to Malaysia.

Prosecutors also dropped dozens of charges against Najib ally Musa Aman, the former leader of Sabah state.

If Najib — currently free on bail — is convicted on Tuesday, he could be sentenced the same day.

Each charge of corruption carries a maximum jail term of 20 years, and each money-laundering count is punishable by a term of up to 15 years.

But the 67-year-old is likely to appeal, and may not be jailed straight away.

If he is found guilty and the conviction is upheld, then he would also be barred from political office for several years.

Bridget Welsh, a Malaysia expert from the University of Nottingham, said a conviction would be viewed positively by many for bringing “some accountability on the scandal of 1MDB”.

By contrast, an acquittal “will do serious damage to Malaysia’s international reputation”, she added.

Authorities in several countries are investigating the 1MDB theft, which funded a global spending spree that included the purchase of high-end real estate, artworks and a superyacht.

The amounts involved in Najib’s first case are small compared to those in his second and most significant trial, which centres on allegations he illicitly obtained over $500 million.

US authorities, who are investigating the fund as money was allegedly laundered through the American financial system, believe $4.5 billion was looted from 1MDB.

Malaysia had charged Goldman Sachs and a string of its current and former staff as the investment bank had helped arrange bond issues worth $6.5 billion for 1MDB.

Prosecutors had claimed that large amounts were misappropriated during the fundraising.

But on Friday, Malaysia agreed to a $3.9 billion settlement with Goldman in exchange for dropping all criminal proceedings against the Wall Street titan.