Does Najib get off scot-free in first criminal trial or will he need to defend himself? Court decides today

KUALA LUMPUR, Nov 11 — After months of waiting, Malaysians will find out today if Datuk Seri Najib Razak is to enter his defence trial over the misappropriation of RM42 million belonging to former 1MDB unit, SRC International Sdn Bhd.

High Court judge Mohd Nazlan Mohd Ghazali will decide if the prosecution has provided sufficient evidence for a prima facie case in the trial that started last April and if so, the country’s first ever former prime minister to be charged with a crime, will be ordered to defend himself.

If there is no prima facie case, Najib will be acquitted and allowed to go free as accorded under Section 173(f)(ii) of the Criminal Procedure Code.

But there is also a possibility that the court may amend the charges against Najib if it finds that a prima facie case has been made of an offence other than those he has been accused of.

With that, here’s a refresher of the seven charges levelled against the Pekan MP.

Three of the charges are for criminal breach of trust for his role as both PM and finance minister.

Another three are money laundering charges of the same RM42 million belonging to SRC International.

The final charge is under an anti-corruption law in which he is accused of abusing his ministerial positions for self-gratification.

The trial so far

To recap, SRC International was initially a subsidiary of 1MDB before it was parked directly under the Minister of Finance Inc.

During the course of the trial, it was revealed that Najib had added a clause in the constitution of SRC International — by appointing himself adviser emeritus — which indirectly gave him control of the company as he had the final say in all major company decisions despite there being a board of directors and shareholders.

The court was also told that then SRC International chief executive Nik Faisal Ariff Kamil was backed by a “powerful” someone, which raised concerns about the firm’s corporate governance and financial practices.

SRC International came under under the scope following an exposé by whistleblower website Sarawak Report in a July 2015 article that culminated in a raid that same month by Bank Negara Malaysia.

Click here to know more about the investment company and its pivotal role in the case.

Vested interest

Najib chaired two Cabinet meetings in 2011 and 2012 in which the government subsequently acted as guarantor to a RM4 billion loan from the Retirement Fund Incorporated (KWAP) to SRC International.

Of note is that as finance minister, Najib sought the Cabinet’s approval to grant government guarantees on the SRC International’s loan applications between 2011 and 2012, but declared that he had no vested interest whatsoever in the deal.

It was also revealed that Najib had asked for the release of the second batch of RM2 billion to SRC International before the company received a government guarantee in 2012.

The two government guarantees and the RM92 million short-term loan recorded and substantiated in the minutes of the Cabinet meetings also revealed that the ministers present did not raise any formal discussions or objections.

Fast forward three years to 2015 and Najib as prime minister approved another RM100 million loan to avoid KWAP declaring an Event of Default (EOD) after cracks began to show in SRC International when it failed to service its debt to KWAP.

In total, three government bailouts totalling RM642 million were approved by Najib and/or his Cabinet between November 2015 and December 2017 to pay off accumulated interest and late payment penalties.

Najib’s bank account

According to documents produced in court, SRC International initially wanted to borrow RM3.95 billion from KWAP in June 2011, and attached a note of approval from Najib to show the PM/FM’s support.

But KWAP only wanted to lend the company RM1 billion, which then saw SRC International lower its request amount to RM2 billion, but with the loan to be backed by a government guarantee.

In all, SRC International got a RM4 billion loan (issued in two separate tranches of RM2 billion each) from KWAP in August 2011 and February 2012. However, bank documents produced in the trial traced RM42 million of that money to Najib’s personal accounts.

Prosecution witnesses also testified that RM85 million in total flowed out from SRC International a few years later into the AmIslamic Bank account of its subsidiary Gandingan Mentari Sdn Bhd.

Bank documents also showed Gandingan Mentari transferred a total of RM50 million to SRC International's purported corporate social responsibility partner Ihsan Perdana Sdn Bhd's (IPSB) Affin Bank account.

Of that, RM42 million (labeled funds for CSR programmes) from IPSB were then transferred in three tranches of RM27 million and RM5 million on December 26, 2014 and RM10 million on February 10, 2015 into two AmPrivate Banking-MY accounts belonging to Najib (2112022011-880 and 2112022011-906).

Bank documents also revealed Najib had signed a declaration to assume responsibility and liability for all transactions in three accounts at AmBank that were opened under his name.

Click here to find out more about the complex money trail that has emerged in the Pekan MP’s money laundering trial.

Big spender

Throughout the course of the trial, the prosecution presented evidence to show that Najib issued multiple cheques form his personal bank accounts totalling over RM7.2 million, which it argued to be illegally sourced from SRC International between January and February 2015.

The court was also told that almost RM3.3 million was diverted from Najib’s accounts to two Platinum credit cards — amounting to 10 transactions at the Swiss jeweller De Grisogono’s Italian outlet and spendings in luxury fashion brand Chanel’s Honolulu outlet in 2014.

Jho Low the proxy

The prosecution also argued that fugitive financier Low Taek Jho, aka Jho Low, played an active role Najib’s opening of AmBank accounts that were shown to be the ultimate destination of funds from SRC International.

Former AmBank relationship manager Joanna Yu Ging Ping told the court that Low was the go-to-person if the bank was unable to contact the main person mandated by Najib to act for his accounts.

Yu testified that during that time, Low instructed the transfer of RM37 million from SRC International into Najib’s account and the flamboyant financier also intervened when Najib overdrew on his credit cards.

Complicity

In its oral submission last month, the prosecution had argued that Najib was complicit in making deposits totalling RM42 million from SRC International into his private bank accounts.

As proof, it pointed to Najib’s failure to file a report with any authority over the massive deposits into his own bank accounts, which should have been the case if it was a mistaken transfer.

The defence countered that argument by saying that Najib did not wish to interfere with ongoing police investigations which began whistleblower website Sarawak Report published its expose article in July 2015.

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