RM6b misused to settle 1MDB debts

KUALA LUMPUR (Oct 25): The Malaysian Anti-Corruption Commission (MACC) has confirmed that former prime minister Datuk Seri Najib Razak and ex-treasury secretary-general Tan Sri Dr Mohd Irwan Serigar Abdullah will be charged today with committing criminal breach of trust (CBT), with sources saying the offences include alleged misappropriation of RM6 billion that was used to settle 1Malaysia Development Bhd’s (1MDB) debts.

MACC said the two men will be charged together, and the offences relate to investigations into “several CBT cases” involving “funds belonging to the Malaysian government”.

The anti-graft agency said it has obtained the permission of the Attorney General’s Chambers to proceed and charge the duo and they are required to present themselves at the Kuala Lumpur Sessions Court at 7.30am.

A spokesman for MACC confirmed that the agency will press the charges under Section 409 of the Penal Code, which deals with CBT committed by a public servant or agent. The penalty under this section is a jail term of between two and 20 years and whipping, and also liable to a fine.

Also to appear in court today to face CBT charges over government-owned funds will be the former director-general of the Prime Minister’s Department research division, Datuk Hasanah Ab Hamid.

“Hasanah will be charged at the KL Sessions Court under the same section,” added MACC in a statement issued yesterday.

Najib and Mohd Irwan, said MACC, were summoned by the agency yesterday “to complete the final process of the investigation and prosecution”.

Najib arrived at the MACC’s Putrajaya headquarters at 2pm and spent around three hours before being allowed to leave the premise. It was his ninth visit to the agency since stepping down as prime minister in May.

Meanwhile, Mohd Irwan was arrested soon after his arrival at 3.26pm. The former treasury secretary-general also served as 1MDB chairman between May 2017 and May 2018, before resigning shortly after Barisan Nasional lost federal power in the 14th general election (GE14).

The charges against Najib and Mohd Irwan will be in relation to dealings between 1MDB and Abu Dhabi’s sovereign wealth fund, International Petroleum Investment Co (IPIC).

In particular, The Edge Financial Daily learnt that the two men will be charged for misusing funds from Bantuan Rakyat 1Malaysia (BR1M) and the federal government’s Consolidated Fund for 1MDB to repay US$1.2 billion (RM4.99 billion) loaned from IPIC under a settlement agreement inked between the two parties in April 2017.

To recap, IPIC was a co-guarantor of two 1MDB bonds totalling US$3.5 billion, which were arranged by Goldman Sachs.

Between 2012 and 2014, 1MDB transferred US$3.15 billion to an entity named Aabar Investments PJS Ltd (BVI) (Aabar BVI) in relation to the bonds, under the assumption it is a unit of IPIC.

Separately, IPIC lent 1MDB US$1.2 billion in May 2015, so the latter could pay its debts — including interests over the two bonds which IPIC co-guaranteed.
IPIC later revealed that Aabar BVI is not its subsidiary, although it shares part of the name with the original IPIC unit Aabar Investments PJS, and lists two of the IPIC unit’s directors as its shareholders.

The two funds then got into a dispute over the missing US$3.5 billion paid to Aabar BVI, before they worked out on the settlement agreement in 2017.
Under the 2017 agreement, 1MDB repaid IPIC the US$1.2 billion it borrowed in 2015. At the time, 1MDB announced it had settled the payment with proceeds raised from asset sales, without elaborating.

Najib, meanwhile, told the Dewan Rakyat on Tuesday that IPIC has agreed to repay the US$3.5 billion to Malaysia under the same agreement, and called for the federal government to make the agreement public.

It will be Najib’s fourth time facing charges in the Malaysian court since July 4.

The former premier is already facing 32 charges involving CBT, abuse of power and money laundering involving more than RM2 billion ringgit — including RM42 million sourced from 1MDB’s former subsidiary SRC International Sdn Bhd.

Hasanah had previously been remanded by the MACC in August.

At the time, she was investigated alongside seven other officers from the research division over allegations of misappropriating government funds for GE14, which is valued at US$12 million.

The developments would mark four high-profile government officials under the previous Barisan Nasional administration to face court conduct on graft-related matters, including former deputy prime minister Datuk Seri Ahmad Zahid Hamidi, who had 45 charges pressed against him earlier this month.

Najib’s wife, Datin Seri Rosmah Mansor, is another high-profile individual brought to court. She has been slapped with 17 charges under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001.

This article first appeared in The Edge Financial Daily, on Oct 25, 2018.

Click here for more property stories.