Najib insists faultless in 1MDB scandal, top firms didn’t raise red flags

This comes after speculation he will be made economic adviser.

A recent meeting between Prime Minister Ismail Sabri Yaakob and his predecessor Najib Abdul Razak purportedly for the latter to give economic advice caused public outrage given his involvement in the 1MDB scandal, which cost taxpayers billions of ringgit.

Despite being the 1MDB chairperson, PM and finance minister at the time, Najib has insisted that he is faultless and might even stand in the next general election.

Claiming that advisers misled him, Najib said he relied on top financial and legal firms like Goldman Sachs, KPMG, Ambank and Wong and Partners, as well as the 1MDB board, to alert him of any red flags.

“I was comforted that these are big brand name firms and that they would have alerted me or the board of 1MDB should there be any red flags. However, such warnings never came,” he said.

Najib was responding to questions from Washington DC-based International Consortium of Investigative Journalists (ICIJ) and Malaysiakini on his involvement, together with that of international law firm Baker McKenzie and its local affiliate, Wong and Partners, in the 1MDB scandal.

This is part of ICIJ and its partners’ reporting on the Pandora Papers, a trove of documents exposing the use of offshore trusts and accounts by the rich and powerful and the firms which facilitate them.

The firms include Baker McKenzie, a leading international law firm, and its local entities Wong and Partners and B&M Consultancy Services, which provided legal and corporate services for 1MDB.

B&M’s Lim Poh Seng was company secretary of both 1MDB and its subsidiary SRC International at the time of the scandal, Companies Commission of Malaysia documents showed.

No hand in appointments of service providers

However, Najib said he had zero involvement in the selection of Baker McKenzie, Wong and Partners, and B&M Consultancy Services.

According to him, the board of the Terengganu Investment Authority (TIA) made the selection.

“The firms were selected by the TIA board of directors upon deliberation by the directors and as recommended by the senior management along with Goldman Sachs, Ambank and KPMG. This was before TIA was put under the federal government, and I became involved in 1MDB.

“All these engagements started when the company was still named TIA and were continued by the senior management and board of 1MDB,” he added.

TIA was renamed 1MDB and came under federal control in 2009 following its acquisition by the Minister of Finance (Incorporated). This took place after Najib became the country’s sixth prime minister.

Although Najib was not formally involved in TIA, a close family friend and lynchpin in the 1MDB scandal, Jho Low, was part of its transition from a state sovereign fund to a federal investment fund that is 1MDB.

Low was the “adviser” who pushed TIA’s top management to sell bonds worth RM5 billion against the terms set by the TIA board – resulting in the federal acquisition, the Parliamentary Public Accounts Committee heard.

It was also through funds linked to Low that cash raised through other government-backed 1MDB bonds were siphoned, some of which ended up in Najib’s account, the United States Department of Justice (DOJ) investigations found.

Goldman Sachs, AmBank and KPMG paying settlements

Still, Najib insisted that he was misled by his advisers and never had direct dealings in 1MDB’s affairs.

“Never had any contact. Not even once. I do not deal with 1MDB or the firms that 1MDB engaged and relied on the senior management and the board of directors to carry out their duties,” he said.

Najib has consistently denied knowledge of any wrongdoings in the 1MDB scandal.

The former premier said the proof that he did not benefit from the 1MDB scandal or that he was the mastermind is the fact he has not had to pay any penalties. Instead, penalties and settlements are now paid by Goldman Sachs, Ambank and KPMG.

He also reiterated that funds that were found to be in his bank account, which he claimed was a donation from Saudi royalty, had been returned.

“The funds commonly known locally as the ‘RM2.6 billion’ and believed to be linked to 1MDB were returned to the sender four months after it was received,” he added.

In January 2016, then attorney-general Mohamed Apandi Ali said Najib had returned US$620 million of the US$681 million (RM2.6 billion) that was channelled into his personal bank accounts as “political donation”.

Prime Minister Ismail Sabri Yaakob (left) meets former Prime Minister Najib Abdul Razak

Confident of successful SRC appeal

Najib is confident his guilty verdict over charges of criminal breach of trust, money laundering and power abuse related to then-1MDB subsidiary, SRC International, would be overturned on appeal.

He claimed the court found that instead of going out to spend the gains of the money laundering, he had to “wait four years” for the money, and in turn, used it not on himself but for “charitable and political use”.

“I was accused and convicted (of having) abused my powers by being involved or (taking) part in a cabinet decision to approve a government guarantee of RM4 billion for SRC in the year 2011. I was not accused of proposing or approving the loan to SRC.

“In a nutshell, this meant that I was found guilty in the SRC case of having to wait four years and having to win the general election and Umno party elections in 2013 to receive 1.0 percent of the said guarantee in stages which I did not use personally,” he added.

Najib was found guilty on July 27, 2020, by the High Court in Kuala Lumpur for abuse of power, criminal breach of trust, and money laundering involving RM42 million in funds from SRC International Sdn Bhd. During the court hearing, he claimed he didn’t know that the millions of ringgit of credit card spending in Hawaii and Italy on luxury items were from SRC.

SRC International was a former subsidiary of 1MDB before it was fully owned by the Minister of Finance Incorporated (MoF Inc).

Najib was then the chairperson of 1MDB’s board of advisers, SRC International’s adviser emeritus as well as finance minister.

He has denied involvement and knowledge concerning the RM42 million and is appealing the conviction.

He is also currently facing trial over four charges of power abuse to obtain bribes totalling RM2.28 billion from 1MDB and 21 charges of money laundering involving the same amount.

Najib’s defence team contends that former 1MDB CEO Mohd Hazem Abdul Rahman acted together with Jho Low and his associates to mislead the former prime minister.

By : ICIJ / MALAYSIAKINI

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