FORMER prime minister Datuk Seri Najib Razak could not have been more wrong when he told The Vibes in an interview that he was on track to solving 1Malaysia Development Bhd’s debt woes when he lost the elections in 2018.
Not only was he impossibly far away from dealing with the debt woes, but he was the main person responsible for the theft and losses of billions of ringgit from 1MDB, for which he is facing serious charges in court.
At the height of the 1MDB crisis in 2016, by which time unrefuted reports showed that some RM2.6 billion came into his accounts from 1MDB funds, and when the auditor-general’s report on 1MDB, which said US$7 billion (RM28.9 billion) was missing from 1MDB, had been classified as secret under the Official Secrets Act, I wrote in this article why Najib was accountable for 1MDB.
Najib cannot deny that he was prime minister at the time that 1MDB was doing most of its deals. Way back in 2009, when 1MDB raised bonds of RM5 billion via AmBank, it was clear that the bonds were considerably mispriced, as I wrote here in 2013.
Najib should have been well aware of the shenanigans at 1MDB dating back from 2009. The full extent of the losses and theft at 1MDB began to be unravelled only in 2015/16 by the AG’s report, which was classified secret, and an extensive investigation by the US Justice Department. The latter report showed that some RM2.6 billion was transferred into Najib’s accounts.
But Najib should have been aware of all of this earlier because not only was he the prime minister and 1MDB was his brainchild, but he was also simultaneously finance minister. Minister of Finance Inc owned all of 1MDB. As the only shareholder of 1MDB, the self-styled national development company only reported to him.
Furthermore, according to Article 117(c) of 1MDB’s memorandum and articles of association, any financial commitment (including investment), restructuring, or any other matter that is likely to affect the guarantee given by the federal government for the benefit of the company, the national interest, national security, or any policy of the government, has to get written approval from the prime minister. Najib must have known about all of 1MDB’s major dealings.
In other words, all the corporate wheeling and dealing that was done at 1MDB could not have been done without the prior knowledge of Najib.
Najib points to the example of Goldman Sachs and AmBank, which paid fines in the billions of ringgit for their roles in the losses at 1MDB, to press home his assertion that he was not culpable.
“They must have done a lot of wrong to be fined to that extent. There is no evidence to say that I collaborated with these entities to cheat 1MDB or the Malaysian government,” he said.
While Low Taek Jho, or Jho Low, the mastermind behind the 1MDB case, was not specifically mentioned by Najib, he could not have done the things he is alleged to have done without Najib’s agreement. It was widely reported that Low had the authority to run 1MDB. Only one person can give him that authority – Najib.
In addition to the money Najib received, US$238 million from 1MDB went to Najib’s stepson, Riza Aziz. Recently, Riza entered into a rather favourable arrangement for his money-laundering case, where he paid no further amounts except for relinquishing his claims on some assets the US Justice Department had seized in the settlement of a case involving money laundering.
Najib in his interview described the Kuala Lumpur-Singapore high-speed rail and Bandar Malaysia, a property development project, as measures that would solve 1MDB’s woes. But he does not go into the source of the debt woes – much of the money raised from the loans was stolen, which is the underlying problem for 1MDB.
He further talked about the East Coast Rail Link (ECRL) project with China as one that would have helped the country. But whichever deal is chosen, whether proposed by Barisan Nasional, Pakatan Harapan, or Perikatan Nasional, the deal would have been bad, as I explained here.
Let’s remember that ECRL, a deal made with China by the Najib regime costing some RM55 billion, first originated as a means to plug the hole of at least RM30 billion in Najib’s other creation, 1MDB, with the connivance and knowledge of the Chinese government.
Najib’s government announced this deal in 2017, but it was clear that the project was not viable – the true cost of ECRL may well exceed RM100 billion, and it was clear in other ways that it was unviable, as I explained in detail in this article and again here.
About a month after PH took over in May 2018, confirmation emerged on how the ECRL deal was related to a plot to siphon money into 1MDB to close that RM30 billion hole. This was by siphoning off RM20 billion in advance payments from ECRL and nearly RM10 billion in questionable pipeline contracts, as I explained here.
In The Vibes’ interview, Najib goes on to say: “That is why I went into this supplementary agreement with the UAE (United Arab Emirates); to retrieve the funds, but when PH came in, it dishonoured that agreement. Otherwise, by December 2020, it would have been resolved – US$3.5 billion with the UAE.”
The fact is that the deal that Najib made with the UAE was bad, and the new attorney-general post-May 2018 elections, Tan Sri Tommy Thomas, was trying to undo it, as I explained here.
Thomas was trying to get back US$5.78 billion, or a massive RM24 billion at current exchange rates, paid or to be paid by 1MDB to an Abu Dhabi state investment company, International Petroleum Investment Company.
“The basis of Malaysia’s legal challenge in the high court in London is that the consent award was procured by fraud or in a manner contrary to public policy,” Thomas had said.
Now that we have broken down the details of Najib’s involvement in 1MDB, one can see the true story of 1MDB and the enormity of Najib’s mistake – and why he decisively lost the 2018 general election due to a public sickened by the entire episode.
It is not so easy to lay to rest the ghosts of 1MDB, which will likely haunt Najib for the rest of his days. – The Vibes, May 18, 2021
P. Gunasegaram is the author of the first book on 1MDB, 1MDB: The Scandal that Brought Down a Government, published in August 2018. He is executive director of research and advocacy organisation Sekhar Institute, and editorial consultant of The Vibes