1MDB: Malaysia begins trial of former Prime Minister

1MDB: Malaysia begins trial of former Prime Minister

Najib Razak. PHOTO CREDIT: BusinessInsider

Malaysia’s former Prime Minister, Najib Razak has gone on trial for his role in a financial scandal that has sent shockwaves around the world.

He faces seven charges in the first of several criminal cases accusing him of pocketing $681 million from the sovereign wealth fund 1MDB.

Najib pleaded not guilty to all the charges on Wednesday.

The 1MDB fund was designed to boost Malaysia’s economy through strategic investments. But instead it allegedly funded lavish lifestyles, a Hollywood film and a super-yacht.

A group of supporters met Najib as he arrived at the court in Kuala Lumpur. They stood and prayed with him before he entered the building to chants of “Long live Najib”.

Najib’s lawyers made a last-minute bid to delay proceedings but the judge ruled against them.

In the prosecution’s opening statement, Malaysia’s Attorney-General Tommy Thomas said the “near absolute power” Najib had wielded carried with it “enormous responsibility”.

“The accused is not above the law,” he said.

While the former prime minister faces several criminal cases, Wednesday’s trial is the first major trial in the scandal.

Proceedings were originally set to begin on 12 February, but were delayed for related appeals to be heard.

Malaysia’s government has also filed criminal charges against Wall Street firm Goldman Sachs, accusing the investment bank of defrauding investors by raising money for 1MDB.

The bank has denied all wrongdoing and said it would “vigorously defend the charges”.

Najib is facing 42 charges in total, mostly linked to 1MDB. The first of several trials begins on Wednesday, centring on the allegations that 42m Malaysian ringgit ($10.3m; £7.9m) was transferred from SRC International, a unit of 1MDB, into Mr Najib’s personal bank accounts.

The case involves three counts of money laundering, three of criminal breach of trust and one of abuse of power. Najib pleaded not guilty to all charges.

The money involved in this particular trial is thought to be in addition to the $681 million that allegedly ended up in his personal accounts.

Najib set up the 1 Malaysia Development Berhad (1MDB) fund in 2009, while he was prime minister to aid the nation’s economic development.

In 2015, questions were raised around its activities after it missed payments owed to banks and bondholders.

The US, one of the countries probing global money laundering, started an investigation saying $4.5 billion had been diverted into private pockets.

US prosecutors had previously said a person described as “Malaysian Official 1” had allegedly received $681 million from 1MDB. That person was later confirmed to be Najib.

Prosecutors said the money had been used to fund a lavish lifestyle for the former PM and his wife Rosmah Mansor, who is also facing charges of corruption.

Source: BBC