Kuala Lumpur Courts Hand PM Najib Dual Setbacks

High courts in Kuala Lumpur on Monday, September 21, handed the Malaysian government twin setbacks, voiding the three-month suspension of two influential business newspapers and also ordering Prime Minister Najib Razak to explain how a whopping RM2.6 billion from unexplained sources ended up in his personal accounts in 2013.

Judge Asmabi Mohamad reversed the July 24 suspension of the Edge Weekly and Edge Financial Daily business publications, saying Home Minister Ahmad Zahid Hamidi had erred by not specifying the exact offending articles the two publications printed on financial irregularities involving the state-backed 1Malaysia Development Bhd. investment fund. In addition, the judge ordered the government to pay RM15,000 in immediate costs and said the court would assess additional damages later. It is believed to be the first time a publisher seeking legal recourse has won back the right to publish, which the Edge lawyers said would begin immediately. The government has a month to seek to reverse the court’s order.

Calls to the newspapers went unanswered. However, the article that finally drove the government to take the action against the two publications, owned by Tong Kooi Ong and run by publisher Ho Kay Tat, on July 21 described in detail how money had flowed out of 1MDB into PetroSaudi International, a Middle East-based oil exploration company, and that US$1.83 billion allegedly was stolen by company officers and others. The two publications also reported on the RM2.6 billion (US$681 million) that ended up in Najib’s personal accounts and triggered a lawsuit by Anina Saadudin, a Langkawi women’s wing member of Najib’s own United Malays National Organization. Both Ho and Tan were summoned by police to be questioned over where they got the information that resulted in the stories.

Zahid “did not comply with procedural fairness as he did not give particulars‎ of the suspension to the applicant," Judge Asmabi said, adding that the minister “had taken irrelevant consideration to impose a blanket ban of three months. The conclusion, on totality of evidence before the court and relevant law, I am satisfied that the decision of the respondent in this case is tainted with illegality."

Just the facts, ma'am

Before delivering her verdict, Asmabi said her ruling was based on the facts presented and was not affected by any other circumstances around 1MDB, which has blossomed into what is arguably the biggest political scandal since Malaysia became a country. The fund, begun in 2009 with advice from a young Penang-born tycoon and friend of the Najib family named Jho Taek Low, now has RMB42 billion worth of debt, an unknown but significant amount of that believed to be unrecoverable. Jho Low, as he is universally known, has been suspected of sidelining millions of dollars into his own accounts in Singapore. Najib is the fund’s financial advisor.

Judge Asmabi said the publisher was put in a "difficult position" given the number of articles published on 1MDB since 2009 and could not give a specific response to the general claim in the show-cause letter. Asmabi also said the home ministry had failed to respond to the publisher's request to specify the questionable articles.

"Bearing in mind that what is being affected here is quite a large thing such as revenue, livelihood of personnel under the applicant, the respondent should have been more careful in preparing a show-cause letter in a better manner to notify the applicant which are the relevant articles said to be undesirable or had infringed provisions or guidelines," the judge said.

A letter from the home affairs ministry stated that the papers’ coverage of the 1MDB scandal was “prejudicial or likely to be prejudicial to public order, security or likely to alarm public opinion or is likely to be prejudicial to public and national interests.”

Judge Asmabi said, however, that the home minister had breached the Printing Presses and Publications Act, which governs licensing of publication, and the “rules of natural justice were breached” as The Edge was not given an opportunity to be heard.

Strike two

In the second case, Anina Saadudin filed suit after UMNO officials kicked her out of the party after she caused a storm at a Langkawi women’s wing meeting with an impassioned rant saying the prime minister was “urinating on the heads of the 3 million party rank and file.” A YouTube video of the young woman’s tirade went viral and was seen by tens of thousands of Malaysians.

Anina's suit demanded that the prime minister return the balance of the missing RM2.6 billion. She is seeking an injunction against Najib and Abdul Rauf, the UMNO general secretary or their agents in the disciplinary board, state liaison body, divisions, and branches to be restrained from removing, suspending and taking disciplinary action on her, pending the disposal of this action.

She is also seeking a repayment amounting to US$650 million - the amount reportedly deposited by Najib in a Singapore bank - and an account of all monies that he had received in the form of donations. On September 18, her lawyers filed for an injunction to freeze Najib's assets and also a judgment of admission on one of the declarations she had sought - that the RM2.6 billion is a political donation. It is uncertain if the order will be heard in court, or will be adjudicated in a magistrate’s hearing.

Too many questions

Najib has been plagued for weeks, since the publication of the Edge’s stories and similar ones in the Wall Street Journal and the Sarawak Report, by an inability to come up with answers as to where the money came from, or what its purpose was. The money flowed into his AmBank account in March of 2013, then disappeared back out of that account a few months later. The money was transmitted to a Singapore account, where shortly after that it disappeared and the account was closed.

Najib acknowledged that it was a donation after the Malaysian Anti-Corruption Commission made its findings on the matter public. However, he or other UMNO officials have issued several different stories on where the money came from. A report that the money had been given to either him or Malaysia for its campaign against the murderous Middle-Eastern Islamic State (ISIS) has been met with derision.