Former Malaysian premier Najib Razak seeks trial for charges linked to $681 million that appeared in his personal bank accounts, as authorities speed up efforts to prosecute those who had allegedly embezzled from the 1MDB state fund.
Najib faces allegations comprising 21 counts of receiving, using and receiving illicit funds, as well as four counts of corruption, after he appeared at court in Kuala Lumpur on Thursday. He has pleaded not guilty in earlier arraignments linked to the receipt of 42 million ringgit ($10.2 million) from a 1MDB unit, as well as to accusations of money laundering and abuse of power.
1MDB is at the center of a global scandal involving claims of embezzlement and money laundering, which have also triggered investigations in the U.S., Singapore, Switzerland and other countries. Malaysian investigators are increasingly moving their sights overseas to advance probes, and the government has sought cooperation from other countries to repatriate monies and assets that it said were purchased with 1MDB money.
Prime Minister Mahathir Mohamad seeks to recoup $4.5 billion potentially lost through the state fund as Malaysia grapples with debt and liabilities worsened by government guarantees on 1MDB debt.
“This case may be harder to make as it involves international fund transfers that could lengthen the time line,” said Khor Yu Leng, an independent economist with Segi Enam Advisors Pte. “Perhaps this announcement will assuage public demand for action on the full amount, but it is tougher and more uncertain. There’s a long list of alleged recipients including many politicians and others. This could trigger a lot of other charges.”
Najib was detained on Wednesday. Charges linked to 1MDB have so far largely revolved around the former leader, while his lawyer Mohd Shafee Abdullah is facing several allegations of money laundering and false income declaration linked to the receipt of 9.5 million ringgit from him. Shafee has been a long-time lawyer for the opposition Barisan Nasional coalition, which ruled the country for more than 60 years before being toppled by the current government in May.
Malaysia has also laid money laundering charges on Low Taek Jho, painted by authorities at home and overseas as a central figure in the 1MDB scandal. Low proclaimed his innocence on his website launched this week, which describes him as a “global philanthropist, investor and entrepreneur.” The police are requesting Interpol’s help to arrest Low and his father Low Hock Peng. His whereabouts aren’t known.
The Monetary Authority of Singapore seized S$240 million of assets in 2016 as part of its probe into 1MDB, whose full name is 1Malaysia Development Bhd. The fund flows that were investigated included those connected with Good Star Limited (Seychelles), Aabar Investments PJS Limited (BVI), Aabar Investments PJS Limited (Seychelles), and Tanore Finance Corp. (BVI).
Last week, Malaysian police said they found a total $972 million of transfers to Najib’s accounts involving 132 transactions through three channels that they identified as Good Star, Aabar and Tanore. Low has been linked in various probes to the companies.
Police are also investigating bond sales and deals by institutions linked to 1MDB, including a $3.5 billion bond offer and purchase of energy assets identified as Tanjong and Genting, as well as a $3 billion debt issue by 1MDB Global Investments for the Tun Razak Exchange project in Kuala Lumpur.