Najib must pay S$1.68 billion to ex-1MDB subsidiary

Malaysia former prime minister (PM) Najib Razak was ordered to pay US$1.3 billion (S$1.68 billion) to former 1Malaysia Development Berhad (1MDB) subsidiary SRC International Sdn Bhd after he was found guilty of breach of fiduciary duty and misfeasance in public office on Mar. 31.

According to The Star, Najib was found to have abused his positions as PM and finance minister to misappropriate investment-related funds and create an advisor role in SRC to control the company.

He was held liable for US$1.18 billion (S$1.52 billion) in losses incurred by SRC in connection with a RM4 billion (S$1.2 billion) loan from the Retirement Fund Incorporated (KWAP).

Used ministerial roles for fund misappropriation

In his ruling, Justice Ahmad Fairuz Zainol Abidin said that Najib is also liable to account for and pay an additional US$120 million (S$154 million) to SRC.

The US$1.18 billion represents losses linked to SRC's proposed investment funds, while the US$120 million is compensation for his fraudulent breach of fiduciary duties.

SRC had filed the lawsuit in May 2021, claiming that Najib had breached his duties, abused his power, misappropriated company funds and personally benefited from those actions.

Fairuz said that Najib "systematically abused his authority" as the then prime minister and finance minister to obtain the KWAP loan through "direct intervention of KWAP's leadership, overriding prudent lending limits and enforcing expedited approvals".

He had also created the advisor emeritus role within SRC to consolidate his control over the company.

He then "exercised constitutional powers" to direct SRC's investment strategy and other matters or function of SRC's business.

Najib also mandated the board to report to him on all material matters.

According to Fairuz, his acts "eliminated all institutional checks and balances", adding that he had abused "every level of authority he controlled".

Will be appealing

Najib was found guilty of breaches of fiduciary duty and misfeasance in public office.

His lawyer confirmed that he would be appealing against Fairuz's decision, and applied for an interim stay of execution on the payment.

The judge allowed the application and granted 14 days for the notice of appeal to be filed.

Top photo via Najib Razak/Facebook