Skip to main content

Advertisement

Advertisement

Explainer: Malaysia's ex-PM Najib and the multi-billion dollar 1MDB scandal

KUALA LUMPUR — Malaysia's top court ordered former prime minister Najib Razak to begin a 12-year prison sentence on Tuesday (Aug 23) after rejecting his appeal against a conviction on charges related to a multi-billion dollar graft scandal at state fund 1Malaysia Development Berhad (1MDB).

Former Malaysian prime minister Najib Razak speaks to journalists outside the Federal Court during a court break, in Putrajaya, Malaysia on Aug 23, 2022.

Former Malaysian prime minister Najib Razak speaks to journalists outside the Federal Court during a court break, in Putrajaya, Malaysia on Aug 23, 2022.

KUALA LUMPUR — Malaysia's top court ordered former prime minister Najib Razak to begin a 12-year prison sentence on Tuesday (Aug 23) after rejecting his appeal against a conviction on charges related to a multi-billion dollar graft scandal at state fund 1Malaysia Development Berhad (1MDB).

The following are details of the scandal and cases brought against him:

WHAT IS 1MDB?

1MDB was a sovereign fund set up in 2009 with the help of Malaysian financier Jho Low to promote economic development.

Najib, who was prime minister from 2009 to 2018, co-founded 1MDB and chaired its advisory board until 2016.

HOW DID BILLIONS GO MISSING?

1MDB raised billions of dollars in bonds for use in investment projects and joint ventures between 2009 and 2013.

Conducting its largest ever kleptocracy investigation, the US Department of Justice (DoJ) said US$4.5 billion (S$6.28 billion) was diverted to offshore bank accounts and shell companies, many linked to Low. Malaysian authorities say billions more remain unaccounted for.

The siphoned funds were used to buy luxury assets and real estate for Low and his associates, including a private jet, a superyacht, hotels, jewelry, and to finance the 2013 Hollywood film "The Wolf of Wall Street", US lawsuits have said.

Low, a fugitive, has been charged in Malaysia and the United States over his central role in the case. He denies wrongdoing.

His whereabouts are unknown. Malaysia has said he is in China, but Beijing denies it.

Najib was not named by the DoJ, but was alluded to in the investigation as "Malaysian Official 1", according to Malaysian and US sources.

WHAT ARE THE CASES AGAINST NAJIB?

Malaysian authorities say Najib illegally received more than US$1 billion traceable to 1MDB.

A person described in US lawsuits as "Malaysian Official 1" allegedly received more than US$1 billion in 1MDB funds, some of which was used to buy jewelry for the person's wife.

The lawsuits said the person received US$681 million shortly before Malaysia's 2013 election, when the Barisan Nasional coalition led by Najib's United Malays National Organisation (Umno) held onto power while losing the popular vote.

Najib, voted out in a 2018 election amid public anger over the scandal, is facing 42 criminal charges over losses at 1MDB and other state entities. If convicted, he could face decades in prison as well as hefty fines.

In July 2020, in the first of five trials, he was sentenced to 12 years in prison and a RM210 million (S$64.9 million) fine after being found guilty of criminal breach of trust, abuse of power, and money laundering for illegally receiving about US$10 million from SRC International, a former 1MDB unit.

The verdict was upheld by an appellate court last year, and on Tuesday the Federal Court ruled against Najib's final appeal.

Other trials he faces involve funds at 1MDB and other government bodies, as well as allegations of audit tampering. He has pleaded not guilty to all charges.

WHAT ARE THE STATUS OF THESE CASES?

Despite the scandal, Najib has retained some of his former popularity and remains influential within Umno, which is now back in power.

He remains on trial in the four other cases.

Najib has said he was misled by Low and other 1MDB officials into believing the funds banked into his accounts were donated by the Saudi royal family.

HOW ARE AUTHORITIES INVESTIGATING 1MDB?

At least six countries, including Singapore and Switzerland, have launched financial mismanagement and criminal investigations into 1MDB dealings, in a global probe that has implicated financial institutions and high-ranking officials worldwide.

In 2020, US firm Goldman Sachs agreed to pay more than US$5 billion, including a record US$2.9 billion in the United States, to settle investigations into its role in underwriting US$6.5 billion in bond sales for 1MDB.

In April, former Goldman Sachs banker Roger Ng, a Malaysian, was convicted by a US court of conspiring to violate an anti-corruption law and money laundering. He is the first, and likely only, person to face trial in the United States over the scheme. REUTERS

Related topics

Malaysia Najib Razak 1MDB crime corruption

Read more of the latest in

Advertisement

Popular

Advertisement

Stay in the know. Anytime. Anywhere.

Subscribe to get daily news updates, insights and must reads delivered straight to your inbox.

By clicking subscribe, I agree for my personal data to be used to send me TODAY newsletters, promotional offers and for research and analysis.