Malaysia ex-PM Najib goes on trial over 1MDB mega-scandal

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Malaysia’s disgraced ex-leader Najib Razak pleaded not guilty to all charges against him as he went on trial Wednesday over a multi-billion-dollar fraud, almost a year after his shock election loss.

The 65-year-old faced the first of several trials over his alleged involvement in the looting of sovereign wealth fund 1MDB, a state investment vehicle established to develop the economy of the Southeast Asian nation.

The former premier and his cronies are accused of plundering billions of dollars from the fund and spending it on everything from high-end real estate to artworks and a luxury yacht.

He had been tipped to win another term in office easily last year and extend his coalition’s six-decade stranglehold on power, only to be soundly defeated by his former boss, Mahathir Mohamad, who rode a wave of public anger over 1MDB to the premiership.

In the months that followed, once-dormant investigations into the controversy were relaunched and Najib was hit with dozens of corruption charges linked to the plundering of the fund.

A small crowd of supporters was waiting for Najib as he arrived at the Kuala Lumpur court ahead of his trial, and he prayed with them for a few minutes before entering the building to shouts of “Long Live Najib”.

– ‘Near absolute power’ –

Looking relaxed in the dock, he denied seven corruption and money-laundering charges related to the alleged theft of 42 million ringgit ($10.3 million) from SRC International, a former 1MDB unit. It is just a fraction of the hundreds of millions of dollars that he allegedly stole.

Opening the prosecution, Attorney-General Tommy Thomas told the High Court it was the “first trial in our courts against a former prime minister, who for nearly a decade occupied the most powerful office in the land and wielded near absolute power.

“Such privilege carries with it enormous responsibility.

“The accused is not above the law,” he added.

After the first witness, an official from the Companies Commission of Malaysia, gave largely technical evidence related to corporate records, the trial was adjourned.

The judge set the next hearing for April 15, and trial dates until May 10. Najib left without commenting, to cheers from his supporters waiting outside court.

Far from being considered a pariah, the ex-leader has gained a following among members of the country’s Muslim majority as some are worried their long-held privileges are being eroded under the new government.

He has become an unlikely social media phenomenon by attacking the new administration’s policies online.

– Billions plundered –

He was initially due to stand trial in February, but appeals by his defence team over procedural matters saw his case put on hold until a judge last week ruled the trial should finally proceed.

It was a relief for the government, as there had been mounting public anger about the delay in bringing Najib to justice.

Najib’s mentor-turned-nemesis Mahathir, now 93 and in his second stint in office, has pledged to bring the younger man to justice and recoup the huge sums of cash stolen from 1MDB.

The US Department of Justice, which is investigating the controversy as money was allegedly laundered through the American financial system, believes $4.5 billion in total was looted from 1MDB.

Malaysia has also charged Wall Street titan Goldman Sachs over the scandal, alleging the bank and its former employees stole billions of dollars from 1MDB.

Goldman units and two ex-bankers are accused of misappropriating $2.7 billion, bribing officials and giving false statements in relation to bond issues they arranged for the fund. The bank has vowed to fight the charges.

While many of Najib’s suspected accomplices have been caught and charged in Malaysian courts, the alleged mastermind behind the 1MDB scandal, playboy financier Jho Low, is still at large.

On Wednesday the Malaysian government said a luxury yacht allegedly bought by Low with $250 million of stolen 1MDB money will be sold for around half that price. The yacht was returned to Malaysia after being seized last year in Indonesia.