What is 1MDB?
Originally 1MDB – an abbreviation of 1Malaysia Development Berhad (which means limited) – was nothing more than a Malaysian state fund, set up in 2009 to promote development through foreign investment and partnerships. The then prime minister, Najib Razak, was its chairman.
The fund has since been at the heart of one of the biggest corruption scandals in the world. The US justice department believes more than $4.5 billion was stolen and the resulting scandal has been responsible for the toppling of a government this year and the arrest of Najib, his wife Rosmah Mansor and a growing number of close associates.
How was the money spent?
Leaked financial documents allege that 1MDB was a hub of fraudulent activity from the outset. Vast sums were borrowed via government bonds and siphoned into bank accounts in Switzerland, Singapore and the US.
Some $731 million appeared in the personal bank account of Najib just ahead of the 2013 election, and is alleged to have been used to pay off politicians, his credit card bill and fund the lavish shopping habits of his wife. Najib denies the allegations and insists the money was donated by a Saudi prince.
Overseas, it is alleged the money funded the ostentatious lifestyle of one of the consultants allegedly brought in to oversee 1MDB, Malaysian businessman Jho Low.
Under Low's watch, it is alleged the fund bankrolled purchases including tens of billions of dollars' worth of property in Beverly Hills and Manhattan, including an apartment once owned by Jay Z and Beyonce; a $35 million private jet; a $260 million yacht; a $3.2 million Picasso given to Leonards DiCaprio; $85 million in Las Vegas gambling debts; a birthday party for Low where Jamie Foxx, Chris Brown, Ludacris, Busta Rhymes and Pharrell Williams performed live and Britney Spears jumped out of a cake; and $8 million in diamonds for Australian model Miranda Kerr.
Tens of millions of dollars also allegedly went towards funding film the Wolf of Wall Street, through a production company run by Najib's stepson Riza Aziz. Low maintains his innocence.
How was the scandal uncovered?
The alleged embezzlement of 1MDB money between 2009 and 2012 went unchallenged until 2015. That year, British journalist Clare Rewcastle-Brown, who ran the website Sarawak Report, was handed 227,000 leaked documents detailing the depth of fraud. The Wall Street Journal was also given documents.
The Malaysian anti-corruption agency (MACC) began investigating and was about to issue a warrant for the prime minister's arrest when Najib acted. During the "week of the long knives", Najib fired the attorney general, Abdul Gani, who had been leading the investigation, sacked deputy prime minister and 1MDB critic Muhyiddin Yassin, and four other ministers who had raised the scandal. The MACC offices were raided and four officials arrested.
Najib’s government also refused to co-operate with investigations in the US, Singapore and Switzerland. In 2016, the Najib-appointed attorney general cleared the prime minister of all wrongdoing and said the issue had “comprehensively been put to rest”.
When was Najib ousted from power?
Not everyone was convinced by Najib’s declaration of his innocence. Mahathir Mohamad, a former PM who had helped Najib to power, continued to be outspoken on the issue. Convinced he was the only person able to act, he announced he would run against Najib in the general election in 2018. His opposition party was elected for the first time in a historic moment, and immediately put 1MDB on the agenda.
Within days of his fall, properties linked to Najib were searched by police. They seized 1,400 necklaces, 567 handbags, 423 watches, 2,200 rings, 1,600 brooches and 14 tiaras, most of which were thought to belong to Rosmah, worth a total of $273 million.
What charges does Najib face?
Najib faces 42 charges across five separate trials, and could face years in prison. He has denied any wrong doing.
So far, a verdict has only been announced in relation to his first trial, where he was found guilty of seven charges including criminal breach of trust, money laundering and abuse of power. Sentencing is yet to be announced but he could face decades in jail. The case centred on the transfer of 42m ringgit ($9.9 million) from former 1MDB unit SRC International into his bank accounts through intermediary companies.
Najib’s second trial is the most significant, and deals with 25 charges over the alleged flow of $731 million of 1MDB funds into his bank accounts. This case is ongoing.
Rosmah has been charged with 17 counts of money laundering. She pleaded not guilty on all counts.
Najib's lawyer, Shafee Abdullah, was also charged with money laundering and tax evasion, while MP Abdul Azeez Abdul Rahim, who belonged to Najib's UMNO party, was arrested and charged in connection with allegations of bribery and money laundering.
Where is Jho Low?
This has been the subject of endless speculation. In 2018, it was said he was partying on a Thai island, though left quickly when Najib fell. Later that year, his yacht, allegedly bought with 1MDB money, was seized in Bali and it has since been rumoured Low was staying variously in the Chinese gambling enclave of Macau, in Bangkok and in Taiwan.
Mahathir, who is no longer in power in Malaysia, had previously appeared to confirm rumours Low was now in China. "It's quite tricky for us to accuse China of hiding him, so we're trying to work out some ways or private efforts to get back Jho Low from China," he said.
Mahathir’s former government confirmed Low has made repeated attempts to strike an immunity deal but they have been refused. – Guardian
