1MDB: What judge said about Arab donation letters, Najib being wilfully blind on RM2.08b deposit and how there is no motive to frame former PM

KUALA LUMPUR, Oct 31 — Yesterday, the High Court decided that former prime minister Datuk Seri Najib Razak has to defend himself against all 25 charges in the 1Malaysia Development Berhad (1MDB) trial.

Here are some highlights of trial judge Datuk Collin Lawrence Sequerah’s key findings, based on a summary of his judgment yesterday:

1. Where did the “Arab donation” letters to Najib come from? “Questionable.”

During the trial, Najib’s lawyers showed four letters allegedly from a Saudi prince which purportedly promised money as gifts to Najib.

Najib’s lawyers said he believed the US$681 million (RM2.08 billion) which came into his AmIslamic bank account were Saudi donations and not 1MDB money, while the prosecution has argued that the four letters were fabricated or fake.

Former 1MDB general counsel Jasmine Loo told the court that while in London in 2015, she saw and heard Malaysian fugitive Low Taek Jho (Jho Low) ordering Kee Kok Thiam to prepare a letter from “Prince Saud” to confirm the money deposited in Najib’s account was a donation from Saudi Arabia, and that she saw Kee preparing the letter dated 2014.

What the judge said:

Loo’s court testimony supports the prosecution’s case that the money Najib received was actually not donations from the Arabs, but is a result of his actions and vested interests as stated in the charges.

“This further raises the reasonable inference that the other letters in respect of the Arab donations were of questionable origin.”

2. Najib should have, but didn’t check where US$681 million in his account came from

There are 21 money laundering charges against Najib, including for receiving US$681 million in his AmIslamic bank account from Jho Low’s associate Eric Tan’s Tanore Finance Corp and for sending US$620 million from the same account to Tanore.

What the judge said:

Since the money involved were “enormous sums” (US$681 million entered Najib’s account, and the return of US$620 million), Najib should have taken “reasonable steps” to check if the money was from unlawful activities.

Najib’s conduct and his actions of receiving, using, and transferring the money could be reasonably used to infer that he had knowledge that the money was from illegal activities.

Based on the prosecution’s evidence, the judge listed the following:

• Code names for Najib’s personal AmIslamic accounts;
• After closing down the account which received US$681 million, he opened three new accounts at same bank;
• Najib was in control and in charge of his accounts as he knew the transactions and their purposes;
• Former Bank Negara Malaysia Governor Tan Sri Zeti Akhtar Aziz’s testimony that Najib had requested a declaration that he had not committed any wrongdoing (but this was turned down);
• Former AmBank banker Joanna Yu saying Jho Low’s role was to ensure sufficient funds in Najib’s “9694” account and this was with Najib’s knowledge.

“Under all the circumstances, I find that the accused was also ‘wilfully blind’ with regard to his failure to inquire into the origin of these funds when the circumstances were such that he ought to have done so,” the judge said.

3. Najib was the ultimate decision-maker for 1MDB matters

Najib faces four charges of abusing his position as then prime minister, finance minister and 1MDB advisory board chairman for his own benefit worth RM2.27 billion, through actions he had taken.

Going through each of the four power abuse charges, the judge noted the prosecution’s evidence of the key roles that Najib played in transactions and matters related to 1MDB.

Specifically for the third power abuse charge which is linked to the US$681 million or RM2.08 billion which entered Najib’s private account, the judge said Najib’s lawyers had claimed that others were involved in the decision-making process for various 1MDB matters (including a Finance Ministry (MoF) letter of support for a 1MDB subsidiary’s US$3 billion bond).

But citing the prosecution’s evidence for this third charge, the judge said “it was the accused who had taken action in various capacities, namely, at the 1MDB stage as sole shareholder, the MoF stage and at the Cabinet stage.”

“The accused was therefore the ultimate decision maker. He had also not seen fit to lodge any police reports in respect of the alleged involvement of others,” the judge said.

To sum up the judge’s findings for the four power abuse charges: the money trail and evidence in court showed that the financial benefits totalling RM2.27 billion — which Najib was accused of abusing his position for — could be traced to funds for 1MDB or its subsidiaries.

4. Can Najib use the defence of benefiting the Malaysian government against the power abuse charges?

The judge disagreed that Najib can use this defence under the Malaysian Anti-Corruption Commission Act’s Section 23(4) for the power abuse charges: “There were no benefits that the actions of the accused had brought to the government of Malaysia and no interest or advantage had accrued to the government.”

5. Can the court believe what prosecution witnesses say?

Short answer: Yes.

What the judge said:

The defence was arguing that some prosecution witnesses cannot be believed because they allegedly have self-serving and vested interests, and claims that Najib is being made a “scapegoat” of these witnesses’ alleged scheme to defraud 1MDB behind Najib’s back.

Among other things, the judge said these prosecution witnesses were candid about their acceptance of certain favours and gifts, and they are not the ones on trial, and their evidence in Najib’s 1MDB trial can be believed despite the allegations against them.

“In the overall scheme of things, this court also finds that there ultimately would be no motive for these witnesses to testify and to frame up the accused who was at the time wielding enormous powers as prime minister and finance minister.

Based on all the evidence including 1MDB’s company constitution (including the need for the prime minister to give written approval first for 1MDB’s investments), Najib was at the top of the decision-making process, the judge said.

“It would be tantamount to suicide for these witnesses to deliberately give evidence against the accused given the latter’s position at the time,” the judge said.

All other prosecution witnesses in this case are also credible and can be believed.

Another preliminary issue: Judge said 1MDB investigations were not biased or shoddy, as investigations started in 2014 when Najib was still the prime minister and resumed in 2018.

So what’s the conclusion?

The High Court has not decided if Najib is guilty or not guilty, but only listed reasons why it finds the prosecution has successfully proven its case on all the 25 charges, and which will result in Najib’s conviction if he does not rebut them.

The 1MDB trial continues on December 2, with Najib to be the first defence witness.

At the same time, Najib is still a prisoner serving his jail term after he was convicted in a separate court case involving SRC International Sdn Bhd’s RM42 million. The Pardons Board has this year reduced his jail sentence from 12 years to six years.

* An earlier version of this article contained an error which has since been rectified.