Former Malaysian Prime Minister Najib Razak was found guilty of all seven charges in the first of several corruption trials linked to the 1MDB scandal.
Najib Razak, who pleaded not guilty to the charges of criminal breach of trust, money laundering and abuse of power, was found guilty by Kuala Lumpur High Court on all seven corruption charges.
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.”
Corruption trial and 1MDB
The trial was widely perceived as a test of the country’s rule of law and anti-corruption initiatives.
The case was centered on the 42 million ringgit or $10 million transferred from the 1Malaysia Development Berhad sovereign wealth fund to the then-prime minister’s private accounts. Najib served as Malaysia’s prime minister from 2009 to 2018.
The 1MDB fund was set up in 2009, during Najib’s reign, to promote economic development in Malaysia. However, issues were raised in 2015 regarding its activities after it failed to make payments owed to banks and bondholders.
According to Malaysian and US authorities, around $4.5 billion was illicitly plundered from the fund and diverted into private accounts. Some of the missing money has been linked to luxury real estate, a private jet, Van Gogh and Monet artworks, and even a Hollywood film.
According to Najib, he was misled by financial advisors, particularly fugitive financier Jho Low who has been charged in both the US and Malaysia but also denies any wrongdoing.
The charges against Najib could result to 15 to 20 years in prison each but prior to the verdict, he said he would appeal if found guilty.
Low formed a settlement deal with the US in October 2019 to return $700 million in assets, including high-end real estate and a luxury hotel. Currently, he is a fugitive and may have been hiding in Wuhan, China, where the coronavirus outbreak began in February.
Goldman Sachs’ settlement deal
Last week, multinational investment bank Goldman Sachs agreed to a $3.9 billion settlement with Malaysia on claims regarding its role in the 1MDB corruption scandal.
Under the $3.9 billion settlement agreement, the government of Malaysia will drop all criminal and regulatory cases against Goldman Sachs. All proceedings will be dropped, including pending cases against subsidiaries of Goldman Sachs and certain current and former directors of the bank.
The deal involves Goldman Sachs paying the Malaysian government $2.5 billion and providing a guarantee that it also receives “at least $1.4 billion in proceeds from assets related to 1MDB seized by governmental authorities around the world”.
Malaysia’s Minister for Finance Sri Zafrul Aziz said: “This settlement represents assets that rightfully belong to the Malaysian people.”
In a statement, Goldman Sachs said: “Today’s settlement is an important step towards putting the 1MDB matter behind us and will help enable the Malaysian government to move forward with additional recovery efforts and to execute on its economic priorities.”
Malaysia’s Ministry of Finance said that “this settlement by Goldman Sachs represents its acknowledgment of the misconduct of two of its former employees in the broader 1MDB fraudulent and corruption scheme”.
The finance ministry added that the deal does “not affect Malaysia’s claims against Jho Low and other parties related to the 1MDB scandal.”