Former Malaysian Prime Minister Najib Razak talks to media at Kuala Lumpur's High Court after a hearing in the 1MDB financial fraud case on October 25, 2018. Photo: AFP via Andalou Agency/Adli Ghazali
Former Malaysian Prime Minister Najib Razak talks to media at Kuala Lumpur's High Court after a hearing in the 1MDB financial fraud case on October 25, 2018. Photo: AFP via Andalou Agency / Adli Ghazali

SINGAPORE – A landmark corruption conviction against former prime minister Najib Razak was unanimously upheld by Malaysia’s Court of Appeal on Wednesday (December 8), a ruling that could slow the ex-leader’s political comeback ambitions and sow new divisions in the ruling United Malays National Organization (UMNO) where he remains highly influential.

The appellate court dismissed the former premier’s appeal to reverse a guilty verdict handed down last July in relation to the misappropriation of 42 million ringgit (US$9.9 million) from SRC International Sdn Bhd, a now-defunct investment vehicle of the scandal-plagued 1Malaysia Development Berhad (1MDB) state fund.

Najib, who has consistently denied any wrongdoing, was sentenced to 12 years in prison and handed a 210 million ringgit ($49.7 million) fine on seven charges encompassing abuse of power, criminal breach of trust and money laundering. Appellate court Judge Abdul Karim Abdul Jalil said he agreed with the High Court’s earlier conviction and sentencing.

But the former premier’s avenues for appealing his guilty verdict are not yet exhausted. Muhammad Shafee Abdullah, Najib’s lead defense counsel, said his case would be appealed next at the Federal Court, the country’s highest and final appellate court. The Court of Appeal then granted a further stay of execution for Najib’s sentencing and conviction.

The former premier will remain free on bail and allowed to carry out his duties as an elected lawmaker pending a final appeal, which could take up to a year. The appellate court’s decision is nonetheless rife with political implications given that other ruling party leaders, including UMNO’s own president Ahmad Zahid Hamidi, face similar criminal charges.

UMNO’s return to power at the helm of the federal government in August prompted speculation and fear that criminally-accused politicians could pressure Prime Minister Ismail Sabri Yaakob, who was appointed to the premiership by Malaysia’s king, to use his office to intervene in their various cases to secure leniency from the courts.

Malaysia’s King Sultan Abdullah Sultan Ahmad Shah has taken issue with the government. Photo: AFP / Nazri Rapaai

“This particular case has been a test for Malaysia’s judiciary, which has performed well. It’s also been a test for the political elites in terms of their willingness to allow the former prime minister to face justice for the 1MDB scandal,” said Bridget Welsh, an honorary research associate at the University of Nottingham Malaysia Asia Research Institute.

“Within UMNO, there will definitely be dissatisfaction with this decision. Ismail Sabri will try to distance himself from this as much as possible. There will also be more scrutiny on Najib’s relationships with both the prime minister and the king, which I think are quite close. My sense is that there will be significant costs if there is any form of interference.”

In addition to seeking to overturn his conviction at the Federal Court, Najib may seek to apply for a royal pardon from constitutional monarch Sultan Abdullah Sultan Ahmad Shah, who has the power to grant full pardons for all offenses committed in federal territories and lift any disqualifications arising from a criminal conviction.

Sultan Muhammad V, the incumbent king’s predecessor, notably granted a royal pardon to opposition leader Anwar Ibrahim in 2018, freeing him from incarceration on politically-motivated sodomy charges and paving the way for his re-entry into politics by lifting a disqualification on his ability to stand for election as a member of Parliament.

Despite his legal troubles, Najib’s political clout has been on the rise in recent months. He and UMNO president Zahid led a rebellion against former premier Muhyiddin Yassin, forcing his resignation in August shortly after he promoted Ismail as his deputy. Ismail, then the most senior UMNO leader in government, was appointed to head a new administration.

Najib’s camp initially took aim at Ismail’s bid to succeed Muhyiddin but ultimately closed ranks to support him. But observers believe Ismail’s standoffish approach to party leaders’ criminal trials could lead to heightened contestation within UMNO from the likes of Najib, who has plainly signaled his intent to stage an ambitious political comeback.

Since losing the 2018 general election amid public outrage over the 1MDB scandal, the former premier, who governed Malaysia from 2009 to 2018, has deftly rebranded himself as a populist disruptor and champion of the everyman, using social media to rally his supporters and pen criticisms of the two governments that succeeded his.

A landslide victory for the UMNO-led Barisan Nasional (BN) in last month’s state election in Melaka has notably emboldened the veteran politician, who fronted BN’s campaign, and his allies. The ruling coalition’s decisive win has sparked speculation that Najib’s camp could push for an early general election, which is due by or before July 2023. 

James Chin, inaugural director of the University of Tasmania’s Asia Institute, said Najib’s camp would ratchet up pressure on Ismail both to intervene in the judicial process and to hold a general election as soon as possible. Najib has not ruled out standing for re-election as a lawmaker despite his criminal conviction.

Former Malaysian prime minister Najib Razak leaves the courthouse in Kuala Lumpur on December 12, 2018, after being charged in court. Photo: AFP / Mohd Rasfan

“Najib’s star was rising very fast after the Melaka election. Now, that’s been slowed down by his court case. But as long as he’s walking around and still holding his MP status, he will remain highly influential,” said Chin. “There is also a possibility that Najib will turn against Ismail Sabri, who he has already applied a lot of pressure on to intervene.”

Welsh, however, said that Najib’s influence and capacity to “destabilize” Ismail’s administration is, in fact, more limited now than during Muhyiddin’s tenure, owing to a memorandum of understanding (MoU) he inked with the opposition Pakatan Harapan (PH) coalition in September to be better insulated from lawmaker defections.

“Najib will continue to use all of his resources to paint [the charges against him] as a kind of injustice and [project himself as] a martyr as he tries to continue strengthening his role. What is very important is that the judicial process be allowed to be to move forward without interference,” Welsh told Asia Times.

During court proceedings on Wednesday morning, Judge Karim ruled that Najib had “full dominion” over SRC International in his capacity as finance minister, a portfolio he also held during his tenure as premier as well as chairperson of 1MDB’s board of advisors, and was fully aware of the misappropriated state funds channeled into his personal bank account.

Throughout his trial, Najib continually maintained that he believed the 42 million ringgit transferred into his account were donations from the Saudi royal family, an explanation that the appellate court judge deemed “a concoction devoid of credit” while stating that there was instead “plenty of evidence showing the funds were from SRC.”

At a virtual briefing after the court ruling, Najib said he was disappointed with the decision and vowed to appeal his conviction and sentencing at the Federal Court. “I did not know and I did not ask and I did not order anyone to move the 42 million ringgit to my account,” the former premier told reporters.   

The appellate court’s judgment followed 15 days of appeal hearings that concluded in May. Prosecutors have leveled 35 other charges in four other trials against Najib, which pertain to losses within the main 1MDB fund and allegations that he tampered with the fund’s audit report in collusion with its former chief executive.

Najib’s legal team had repeatedly tried to delay the appellate court hearing, submitting a postponement application in November which was denied. The former premier’s lawyers again requested to defer proceedings on December 7, alleging he and members of his legal counsel had come in contact with Covid-19 positive persons.

But Judge Karim reprimanded Najib’s defense counsel and questioned whether the move was a last-ditch attempt to delay the appeal verdict. The appellate court judge then threatened to issue an arrest warrant against the former premier if he failed to turn up for proceedings slated for that afternoon, which the court directed be held virtually.  

Najib presented himself for the online hearing, where his legal team presented an ultimately unsuccessful eleventh-hour application to adduce fresh evidence to support his appeal relating to the alleged involvement of former Bank Negara Malaysia (BNM) governor Zeti Akhtar Aziz and her husband Tawfiq Ayman in the 1MDB scandal.

A signboard for the 1Malaysia Development Berhad state fund in Kuala Lumpur. Photo: AFP

The government’s anti-corruption watchdog, the Malaysian Anti-Corruption Commission (MACC), revealed last month that a company co-owned by Tawfiq and Samuel Goh, an insurance broker who previously set up a fund used by fugitive businessman Low Taek Jho, had been the beneficiary of nearly $16.3 million in misappropriated 1MDB funds.

Najib’s lawyers contend that Low, a trusted confidant to the then-premier who held no official position at 1MDB but had exercised significant control over its dealings, had misled him and that Zeti, the then central bank governor, must have been complicit with Low because Bank Negara had failed to flag billions in 1MDB-linked outflows.

Authorities in the United States and Malaysia believe an estimated $4.5 billion was embezzled from 1MDB between 2009 and 2014, with more than $1 billion having made its way into Najib’s personal accounts. Jeff Sessions, a former US attorney-general who oversaw a probe into 1MDB, once described the scandal as “kleptocracy at its worst.”

When asked why the defense had sought to introduce fresh evidence only days before the appellate court’s ruling, defense counsel Muhammad Shafee told a press conference last week that the MACC’s findings had only surfaced recently after allegedly being suppressed by authorities since Najib’s ouster in 2018.

The appellate court, however, dismissed the bid to adduce new evidence, ruling that it did not fulfill the criteria of being relevant, and at the following day’s hearing similarly rejected Najib’s defense that all his actions regarding SRC were taken in the national interest.

“There is no national interest here, just a national embarrassment,” Judge Karim quipped.