Euromoney, July 30 2020
Najib Razak’s 12-year sentence on corruption charges is a landmark for Malaysia. But he also tried to drag in former Bank Negara Malaysia governor Zeti Akhtar Aziz and AmBank managing director Cheah Teck Kuang.
This week former Malaysian prime minister Najib Razak was sentenced to 12 years in jail after being found guilty on seven corruption counts associated with 1MDB in the Kuala Lumpur High Court.
He was also fined RM210 million ($49 million).
The transcript of judge Mohamad Nazlan Mohama Ghazali explaining his judgement has become available and will be of interest to several key financial figures in Malaysia – but not, for once, Goldman Sachs, which isn’t referenced in the 55-page judgment (this is only the first of potentially five trails related to Najib and 1MDB).
This trial focused on wrongdoing around a subsidiary of 1MDB called SRC International; it was alleged that transfers totaling RM42 million from SRC were placed into Najib’s account at AmIslamic Bank in 2014. These were presented as a gift from the Saudi royal family.
The judgment says Najib testified that he had spoken with Zeti Akhtar Aziz, then governor of Bank Negara Malaysia, “and informed her about the donation he was expecting.” “The accused took comfort in this,” the judgment reads, reasoning that if anything was suspicious, Bank Negara would raise its concerns.
Former Ambank managing director Cheah Teck Kuang gave evidence that he had met with Zeti and discussed the opening of Najib’s personal account, called Account 694 in the ruling.
None of this affected the judge’s thinking on Najib’s guilt: he described the advance meetings around the accounts as “entirely… self-serving” and “pushing the onus of determining whether the foreign remittances would [be] regular or otherwise to Ambank and Central Bank”.
The judge’s view was that if Bank Negara didn’t like what they saw, “the accused would easily have pleaded ignorance” and points out that “at the material time, the accused was also the prime minister and the finance minister of the country. This must have embolden[ed] the accused.”
This touches upon a question that has never quite been entirely resolved: what exactly Zeti, among the most highly regarded central bank governors ever in Asia, knew about the money in Najib’s accounts and what she did about it.
Last year, Zeti explained to me her battles over 1MDB with the ministry of finance (run by Najib) and the attorney general from 2013 to 2015, during which Bank Negara highlighted its concerns about 1MDB and eventually took legal action against it. Eventually she revoked 1MDB’s approvals to make investments abroad and refused all subsequent ones. But at the time of this meeting she was unable to discuss anything about Najib’s accounts because of the trials – and still can’t, because there are up to four more to come. She has said she will comment when the cases are done.
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