1MDB case: Trial into global corruption scandal begins

The trial against former Malaysian Prime Minister Najib Razak has continued to unveil the depth of corruption involving 1Malaysia Development Berhad (1MDB). Over two hearings at Malaysia’s High Court, Mr Razak has so far pleaded not guilty to seven charges relating to criminal breach of trust, money laundering, and abuse of power surrounding the theft of US$10.3 million from 1MDB subsidiary SRC International (SRC). With a total of 42 charges leveled against him and multiple companies involved worldwide, the repercussions are set to be ongoing.

Both the US Department of Justice and Malaysian prosecutors have taken legal action, with an estimated $US4.5 billion in total misappropriated from the state investment fund 1MDB. In his capacity as both prime minister and finance minister, Najib was able to use his position to allegedly divert funds into personal accounts and provide for a lavish lifestyle. US-based investment bank Goldman Sachs has also been brought into the scandal. Former employees are said to have falsified statements relating to illegal bond transactions with 1MDB and taken advantage of lenient compliance procedures.

The assistant registrar at the Companies Commission of Malaysia gave technical evidence on corporate records during the first day of the trial. SRC, its subsidiary Gandingan Mentari and Ihsan Perdana, which was a corporate social responsibility partner for 1MDB, have also been implicated. But while many officials involved in the money laundering have been caught, the suspected mastermind behind the entire scheme, Jho Low, remains at large. A second trial will begin in November, focusing on reports that Razak deliberately tampered with the final audit report for 1MDB to mislead the Public Accounts Committee and avoid criminal action. But with 3000 pages of evidence submitted by the prosecution, it appears that this expansive corruption case is unlikely to go unpunished. It serves as a reminder to all government and financial organisations that checks on power and due diligence over where funds are being directed cannot be underestimated.

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Source: Channel News Asia, Malay Mail