KUALA LUMPUR/SINGAPORE (July 28): Seen as a test of Malaysia's anti-corruption credentials, the guilty verdict against former prime minister Datuk Seri Najib Razak in the first of the 1Malaysia Development Bhd (1MDB) trials could strengthen the new government's hand after months of political turmoil.
The High Court today sentenced Najib to 12 years in jail after finding him guilty of all seven charges in the case involving RM42 million of funds deposited in his personal accounts from a former unit of troubled state fund 1MDB. While Najib's lawyer said he would appeal the ruling, the decision provides Prime Minister Tan Sri Muhyiddin Yassin political capital at a time when his administration controls a razor-thin majority in Parliament and talk of a snap election is heating up.
The verdict comes days after a US$3.9 billion settlement struck with Goldman Sachs Group Inc to help resolve the 1MDB case against the bank, while seeing Malaysia recoup some of the money lost through the troubled state fund.
"Politically, it strengthens PM Muhyiddin's hand," said Dr Wong Chin Huat, a political scientist and professor at Sunway University. "He could claim that the anti-graft drive that started under" the previous Pakatan Harapan government "is continuing under him".
Muhyiddin's government came to power earlier this year on the backing of the United Malays National Organisation, known as Umno, the party once led by Najib. Since then, the administration has faced public backlash after prosecutors reached a deal to drop 1MDB-related charges against Najib's stepson Riza Aziz, even as Muhyiddin himself repeatedly pledged to ensure justice.
Budget vote
While the ruling today means the prime minister could lose support from pro-Najib factions within Umno, he may be able to pick it up elsewhere, which would be critical to securing majority support for the 2021 state budget set to be tabled in Parliament this November, Wong said. Sticking to the reforms promised by the last government may also help him in the event of an election.
The opposition has been planning to launch a no-confidence vote against Muhyiddin for months, even as it struggled to agree on who should be its prime minister candidate.
"This story is far from over," said Peter Mumford, Southeast & South Asia practice head at risk consultancy Eurasia Group. "In some ways, the outcome is better for Muhyiddin as it would be tricky for him to campaign in the likely upcoming election if there were accusations that he had somehow engineered an acquittal for Najib."
No 'reasonable doubt'
Delivering the verdict today, High Court judge Justice Mohd Nazlan Mohd Ghazali said he found "the defence has not succeeded in rebutting the presumption on the balance of probabilities or raising reasonable doubt on the charge against the accused".
Najib was sentenced to 12 years in jail for one count of abuse of power, as well as 10 years each for three charges of money laundering and three criminal breach of trust charges, to be served concurrently. He must also pay a fine of RM210 million or face an additional five years' imprisonment. He was released on bail late today.
"Najib's influence among conservative Malays is still strong," said Prof Dr Awang Azman Awang Pawi, an associate professor at the University of Malaya. "This does not mean the end of Najib's political life because there is an appeal process and anything can happen in politics."
Prosecutors questioned dozens of witnesses over months to build a case that showed Najib's "pervasive and imperious" role in SRC International Sdn Bhd, the former unit of 1MDB, the judge said in November. Today, the former leader maintained he acted in the best interests of the country and said he never demanded the money and had no knowledge of it. His lawyers argued he had been misled by others, including fugitive financier Low Taek Jho, more commonly known as Jho Low.
Jho Low played a crucial role in transferring the funds to Najib's account, the judge said today. BlackBerry Messenger conversations revealed the two were communicating, and there was no basis to claim the account balance was being hidden from Najib. Jho Low has consistently denied wrongdoing.
The judge also dismissed the defence's premise that they believed the funds were a donation from the Saudi royal family. Najib could have verified it himself with the Saudi government, yet chose to take Jho Low's word for it, the judge said. On charges of money laundering, the judge said Najib practised "willful blindness" to the receipt of the proceeds.
The trial is only the first of at least three involving Najib, who faces dozens more corruption and money-laundering charges, including those linked to billion-dollar acquisitions and bond sales by the scandal-ridden fund.
"The verdict is a huge win for Malaysians," the opposition Pakatan Harapan alliance wrote in a statement. "This process would certainly have not started if the people had not risen up and secured Pakatan Harapan's victory" in 2018's 14th general election, when the coalition ousted Najib in the country's first change of government since its independence on a wave of public anger over the 1MDB scandal and rising living costs.
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