Malaysia PM Najib Forced Into Corner on Family Assets

Malaysian Prime Minister Najib Tun Razak seems to be digging himself a deeper and deeper hole over the source of what is believed to be vast personal wealth referred to by the New York Times in a Feb. 8 article describing family assets.

In the Times article a prime minister’s office spokesman said the premier’s wealth derives from what was called "legacy family assets", implying that a considerable estate had been amassed by his father, Tun Abdul Razak Hussein, who died in 1976. That in turn precipitated an explosion by Najib’s four brothers, who issued a public statement saying their father was a highly principled man who had died in modest circumstances, “and any statement or inference to the contrary would be totally false and misleading to his memory and to his service and sacrifices for the nation. We take issue with anyone who taints his memory, whatever the motive. We would also like to add that our whole family is united on this issue.”

The entire issue has been boiling over for weeks amid concerns that the wheels have come off 1Malaysia Development Bhd., the ill-starred sovereign development fund initiated by Najib in 2009 along with a flamboyant then-27-year-old financier named Low Taek Jho, known universally as Jho Low. The fund is believed to have billions of dollars in unfunded liabilities from unwise investments, although its officials say it is solvent.

The issue is deeply intertwined with the country’s internecine political wars. The source of the premier’s wealth has become a potent weapon in the hands of both his enemies in his own UMNO and the opposition Pakatan Rakyat coalition. The prime minister’s critics have unlimbered the heavy artillery in recent weeks in an attempt to drive him from office. Mahathir and his allies are backing Muhyiddin Yassin, the deputy prime minister and vice president of UMNO, to take over.

That has unsettled many in the country, as Muhyiddin is regarded as a more strident Malay nationalist than Najib as well as possessing a sizeable fortune himself, which includes a private jet despite having joined state service himself upon graduating from university, later taking up management positions at various state-owned enterprises.

Najib, who has been careful not to bait critics, immediately backed away from the family legacy statement, blaming his press secretary. In a statement to two Malay-language newspapers owned by UMNO, Utusan Malaysia and Berita Harian, Najib said his father had never abused his powers for personal benefit.

That in turn has raised a huge storm, with critics pointing out that Najib’s annual salary is RM350,000, hardly enough to support the family investments in property in New York and Beverly Hills running into the tens of millions of US dollars, as well as the lavish spending by his wife, Rosmah Mansor, for jewelry including diamond and emerald rings and bracelets and a half-dozen Birkin handbags worth upwards of US$7,000 each.

“If...Najib Razak believes that his source of unusual wealth and a lifestyle of exuberant luxury is all acquired scrupulously, then he must explain how he obtained them when his only occupation was as the Pahang Menteri Besar [chief minister,1982-1986], cabinet minister [1986-2004], Deputy Prime Minister [2004-2009] before assuming the Prime Ministership since 2009,” said Tony Pua, a member of parliament from the opposition Democratic Action Party, in a prepared statement. “I am certain that the Prime Minister will agree with me that his lack of transparency and the exposé of his family’s hidden and not-so-hidden wealth will only encourage more unhealthy speculations on the origins of his family’s outsized wealth.”

The denials in the Malay language papers raised other issues. The Utusan article explained that Najib’s maternal grandfather, Mohamad Noah Omar, financed his and his siblings’ education. However, A. Kadir Jasin, a close ally with former Prime Minister Mahathir Mohamad, who is seeking to oust Najib, sprang into the debate, pointing out that “When Mohamad Noah is dragged into the issue of the alleged inheritance that Najib is benefitting from, there are bound to be questions about who he was and how he acquired his wealth.”

Mohamad Noah, one of Umno’s founders, Kadir said, was a business partner of Lim Goh Tong, in a venture to create Malaysia’s gigantic casino project at Genting Highlands in the mountains above Kuala Lumpur in 1965. Gambling is strictly verboten by Islamic law.

“On April 27, 1965, Tan Sri Haji Mohd Noah and I set up a private company called Genting Highlands Sdn Berhad,” Kadir quoted Goh as writing in his memoirs. “Between the years 1965 and 1970, we made applications to the Pahang and Selangor governments for 4,940 hectares and 1,110 hectares of freehold land respectively.”

“Where are the legions of Najib’s media, communication and psy-war advisers and image makers and what are they doing?” Kadir asked.