Malaysia faces crucial graft test as former PM Najib Razak’s first 1MDB verdict looms

Prosecutors allege more than $1 billion made its way into former Malaysia prime minister Najib Razak’s personal accounts over the 1Malaysia Development Berhad scandal. (AFP file photo)
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Updated 26 July 2020

Malaysia faces crucial graft test as former PM Najib Razak’s first 1MDB verdict looms

  • Najib Razak was voted out in a historic 2018 election amid public anger
  • Prosecutors allege more than $1 billion made its way into his personal accounts

KUALA LUMPUR: Malaysian former prime minister Najib Razak, fighting dozens of charges over a multi-billion-dollar graft scandal at state fund 1MDB, faces his first verdict on Tuesday in a landmark case that tests the country’s efforts to stamp out corruption and could have big political implications.
Najib was voted out in a historic 2018 election amid public anger over allegations that $4.5 billion was stolen in a globe-spanning scheme from 1Malaysia Development Berhad (1MDB), a fund he co-founded. Prosecutors allege more than $1 billion made its way into his personal accounts.
His party returned to power this year in an alliance led by Prime Minister Muhyiddin Yassin, prompting some to question how whether the return would affect several corruption cases against Najib and his allies.
For Najib, the verdict in the years-long saga, which has seen a spectacular fall from extreme opulence and a dominant position in Malaysian politics, marks a reckoning for the urbane, British-educated politician — potentially decades in jail or a partial vindication.
It also comes just four days after the announcement of a $3.9 billion settlement with Goldman Sachs in return for Malaysia dropping criminal charges against the investment bank over its role in helping 1MDB sell $6.5 billion in bonds.
Najib will first hear the verdict on seven charges he faces over receiving $9.9 million from former 1MDB unit SRC International in 2014. He has pleaded not guilty to criminal breach of trust, money laundering and abuse of power.
“We believe we have adduced more than enough evidence to cast reasonable doubt on the prosecution’s case,” defense lawyer Harvinderjit Singh said.
If convicted, Najib could face hefty fines and jail terms of as much as 15 to 20 years on each charge.
It is unclear if he would be sentenced immediately if found guilty. Singh said sentencing could be delayed or suspended due to the complex nature of the case.
The verdict and Friday’s settlement, seen as a boost to Muhyiddin’s fledgling four-month old administration, come amid speculation the prime minister may call elections soon. Muhyiddin has a slim majority in parliament, and the opposition is gearing up for polls.
Liew Chin Tong, an opposition politician, said a guilty verdict for Najib could boost Muhyiddin’s popularity. But it could also create tensions within the ruling coalition — Najib’s party is the biggest component — and increase calls for a snap election, he said.
Najib no longer leads the party but remains highly influential.
He declined to comment on the upcoming verdict but appeared relaxed on Thursday, celebrating his 67th birthday by sharing a cake with supporters at the Kuala Lumpur courthouse where he has become a regular presence the past two years.
Low, who faces charges in Malaysia and United States over his central role in the case, also denies wrongdoing. The offices of the prime minister and the attorney-general did not respond to requests for comment.
Muhyiddin this month said he would work to implement broad anti-corruption reforms, amid concerns raised by activists over the fate of several high-profile graft trials.
Prosecutors last month withdrew charges against Najib ally Musa Aman, shortly after settling a $248 million 1MDB-related case involving the ex-premier’s stepson Riza Aziz.
“If you continuously have high-profile cases being dropped, people can’t believe that,” said Transparency International Malaysia director Muhammad Mohan. “The real victory will come only when there are convictions.”
The global watchdog expects Malaysia’s ranking on its corruption perception index to fall this year.
The verdict also comes as Najib enjoys a resurgence in popularity after embarking on an extensive public makeover, adopting a more personable tone to replace his image as a wealthy elite.
He maintains an active social-media presence, hitting out at the opposition and posting light-hearted updates on Facebook, where he has over 4 million followers, more than any other Malaysian politician.


Aramco profits fall in tough quarter, but sees partial recovery from COVID-19 impact

Updated 09 August 2020

Aramco profits fall in tough quarter, but sees partial recovery from COVID-19 impact

  • Aramco see’s “partial recovery” from pandemic impact
  • Aramco president says company remains resilient

DUBAI: Saudi Aramco, the world’s biggest oil company, reported a net income of $6.57bn for the second quarter of 2020, the period which witnessed the most volatile oil market conditions for many decades.

The result, announced to the Tadawul stock exchange in Riyadh where the shares are listed, compared with income of $24.7 bn last year.

Amin Nasser, president and chief executive, said: “Despite COVID-19 bringing the world to a standstill, Aramco kept going. We have proven our financial resilience and operational reliability, setting a record in our business operations, while at the same time taking steps to ensure the health and safety of our people.”

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Aramco’s dividend - a big attraction for the investors who bought into the world’s biggest initial public offering last year - will remain as pledged, Nasser added. Cash flow in the quarter amounted to $6.106 bn.

““Strong headwinds from reduced demand and lower oil prices are reflected in our second quarter results. Yet we delivered solid earnings because of our low production costs, unique scale, agile workforce, and unrivalled financial and operational strength. This helped us deliver on our plan to maintain a second quarter dividend of $18.75 billion to be paid in the third quarter,” he said.

Aramco said the loss was “mainly reflecting the impact of lower crude oil prices and declining refining and chemicals margins, partly offset by a decrease in production royalties resulting from lower crude oil prices and a decrease in the royalty rate from 20 per cent to 15 per cent, lower income taxes and zakat as a result of lower earnings, and higher other income related to sales for gas products.”

Sales and revenue in the period - which saw oil prices collapse on “Black Monday” in April - fell 57 per cent to $32.861 bn from the comparable period last year. 

Nasser said he was cautiously optimistic that the world economy was slowly recovering from the depths of the pandemic lockdowns.

“We are seeing a partial recovery in the energy market as countries around the world take steps to ease restrictions and reboot their economies. Meanwhile, we continue to place people’s safety first and have adapted to the new normal, implementing wide-ranging precautions to limit the spread of COVID-19 wherever we operate.

“We are determined to emerge from the pandemic stronger and will continue making progress on our long-term strategic journey, through ongoing investments in our business – which has one of the lowest upstream carbon footprints in the world,” he added.

Aramco expects capital expenditure to be at the lower end of the $25bn to $30bn range it has already indicated for this year.