KUALA LUMPUR, June 2 — Datuk Seri Najib Razak has filed an application to ask the High Court to strike out the bankruptcy notice in relation to a sum of nearly RM1.74 billion in taxes and interest that the Inland Revenue Board (IRB) is demanding from him.

Najib’s lawyer Muhammad Farhan Muhammad Shafee confirmed that the former prime minister had filed this application on May 31.

"We filed a summons in chambers last Monday to strike out the Bankruptcy Notice filed by the Government of Malaysia on the basis that it is mala fide and an abuse of process,” he told Malay Mail when contacted today. Mala fide is a term that means in "bad faith”.

Farhan said no hearing date has been fixed for the case yet as it is still at the case management stage, and that the case is scheduled for case management next on July 22.

In April this year, the IRB had served Najib with the bankruptcy notice dated February 4.

The bankruptcy notice notified Najib that he was required to pay RM1,738,804,204.16 or almost RM1.74 billion to the IRB, which comprised of the RM1.69 billion sum he was ordered to pay and also RM45,916,279.33 or RM45.9 million in interest plus RM15,000 in costs.

The IRB as the creditor had started bankruptcy proceedings against Najib through this bankruptcy notice.

In a May 31 affidavit in support by Najib to support his application to strike out the bankruptcy notice, the Pekan MP and former Umno president had claimed that the bankruptcy notice was an abuse of process, premature and as the tax amounts claimed for the years 2011 to 2013 were allegedly outside of the statutory limitation period under the law.

Among other things, Najib said he believed that the bankruptcy notice was an abuse of process, claiming that it was allegedly used for a collateral purpose of "damaging my reputation and political career”.

He also claimed that there was wrongful calculation by the IRB and Malaysian government of the taxes being claimed from him, alleging that this was "intentional in order for my political opponents to manipulate public perception to imply and/or indicate that I am a person who evades taxes (which is strongly denied)”.

Among other things, Najib had claimed that the way the alleged unpaid taxes of more than RM1 billion was calculated and based on a RM3,353,906,227 (RM3.35 billion) sum deposited in his bank accounts would imply that he had more than RM7 billion in income.

"I can confirm for the record that I do not have or ever had any money anywhere near the figure of RM7,328,454,200, income or otherwise,” he said in the same affidavit.

He also claimed that the RM1,344,602,070 that entered his account and was disbursed out was allegedly "not taxable” as it purportedly cannot be categorised as "income”, and claimed that over RM2 billion (RM2,034,350,000) that entered his bank accounts were allegedly "refunded to the sender” but was categorised as his personal income and personal expenditure.

Earlier in the same affidavit, Najib had also claimed that he believed the main objective of the bankruptcy notice was not to recover funds from him, but was purportedly aimed at garnering alleged benefit from the effect of bankruptcy to have him ejected from public office as a member of Parliament and to "handicap me as a key member of the opposition”.

Despite being a member of ruling party Umno that is also part of the federal government, Najib had also claimed that the ruling government was allegedly controlled by his "political opponents”.

He also claimed that he had submitted his tax returns accurately for the years claimed by IRB, and said he had paid the income tax due for such years.

The IRB’s efforts in court to have Najib pay the alleged unpaid taxes had started three years ago in 2019.

On June 25, 2019, the IRB via the government of Malaysia filed a lawsuit against Najib in the High Court in Kuala Lumpur, claiming a total of RM1,692,872,924.83 or RM1.69 billion in unpaid taxes from him for the years 2011 to 2017.

On July 22, 2020, High Court judge Datuk Ahmad Bache ruled in favour of the IRB, by granting a summary judgment to allow the IRB to collect the RM1.69 billion of tax arrears from Najib.

Najib was ordered to pay the RM1.69 billion along with an interest of five per cent per annum from the date of the court order until it was paid, and RM15,000 in costs.

The judge said that Najib’s challenge within the lawsuit against the tax assessment should be made to the Special Commissioners of Income Tax instead of the courts, as his challenge involves questions of facts.

Najib has since filed an appeal against the High Court decision where he was ordered to pay the RM1.69 billion sum, with his appeal scheduled to be heard at the Court of Appeal on June 16.

Najib had also applied for a stay of the High Court’s order while waiting for the Court of Appeal to hear and decide on his appeal. The High Court has yet to hear this application, with the hearing date previously scheduled for June 11.