Orchestration of fraud: Ex-PM Najib must reimburse US$1.3B to company

KUALA LUMPUR: The High Court in Malaysia ordered former Prime Minister Najib Razak to pay damages worth US$1.3 billion (S$1.663 billion) to SRC International Sdn Bhd in yet another breach of trust and abuse of power case.

Judge Datuk Ahmad Fairuz Zainol Abidin delivered the decision after reading his judgment for nearly four hours.

He said Najib has to pay conspiracy damages, interest at 5% per annum, costs, and other reliefs deemed appropriate by the court.

The court also found that Najib, the emeritus adviser of the company, held absolute power in every major decision involving SRC, including the diversion of US$120 million into his personal account.

“The defendant played a key role in the establishment of SRC as a subsidiary of 1MDB in January 2011. He directed the transfer of SRC’s ownership from 1MDB to the Ministry of Finance Incorporated (MoF Inc) in 2012, thereby removing it from 1MDB’s oversight and placing SRC directly under his control as Prime Minister and Finance Minister.

"He also personally engaged with the Chairman of the Retirement Fund (KWAP) in 2011 before any official board resolution was made, and discussions to obtain the first loan proved that the initiative was his.

"He caused amendments to the company’s constitution requiring his own approval as shareholder. He further directed the channelling of funds to SRC BVI and its BVI subsidiary, structures that had no legitimate investment purpose but were designed to facilitate misappropriation, resulting in US$120 million being diverted into his personal account,” the Judge said during proceedings.

Justice Ahmad Fairuz found that Najib was, in effect, a shadow director of SRC International, directing key decisions on loans, fund transfers, and investments, all without proper oversight or due diligence.

Ahmad Fairuz further stated that Najib’s actions were planned fraud for personal gain.

The court found the defendant responsible for repaying the company’s funds and compensation totalling US$1.18 billion (RM4.77 billion) and US$120 million (RM484.86 million), respectively.

Najib, 72, has been serving his sentence at Kajang Prison since August 23, 2022, after being convicted of misappropriating RM42 million of SRC International funds.

In a recent case, Najib admitted that, based on subsequent knowledge, the RM42 million deposited into his personal bank accounts was not a donation from the Saudi royal family.

Najib has always insisted that large sums of money in his accounts were donations given to him to fight against ISIS and other forms of Islamic extremism.

Najib made a rare apology for his mishandling of the multibillion-dollar 1Malaysia Development Berhad (1MDB) financial scandal, but maintained he did not know about illegal transfers from the now-defunct state fund.

1MDB, a sovereign wealth fund co-founded by Najib in 2009, has faced corruption probes in at least six countries.

Najib is said to have been at the centre of the alleged misappropriation of over $4.5 billion by high-level officials of the fund and their associates. He denied all crimes.