Plan to Drop Charges Against Najib Stepson Stokes Outrage in Malaysia

Riza Aziz, accused of laundering millions, could walk free

Photo Credit: New Straits Times

By: Toh Han Shih

A plan to drop charges against discredited former Malaysian Prime Minister Najib Razak’s stepson Riza Aziz has shocked the country and stoked fears that the  government could drop charges against Najib himself and his wife, Rosmah Mansor, who have been accused of stealing hundreds of millions of US dollars from the state-backed 1Malaysia Development Bhd investment fund.

Former Malaysian Attorney General Tommy Thomas, in a May 18 statement, objected to the settlement with Riza, raising questions whether the government will continue to pursue justice over the scandal, in which US$4.6 billion was allegedly lost to 1MDB from theft and mismanagement.

Riza was a close friend of Low Taek Jho, the flamboyant Malaysian financier who dreamed up 1MDB and is accused of playing a key role in the theft of billions of dollars from 1MDB. Along with others, Riza founded Red Granite Productions, which produced “The Wolf of Wall Street,” a gratuitously profane movie based on the true story of convicted US fraudster Jordan Belfort, in an example of life imitating art. Jho Low, as he calls himself, is a fugitive from justice.

The Malaysian legal community is questioning whether the planned dropping of charges against Riza was “a correct, justifiable and desired outcome in the public interest,” Lim Chee Wee, a former member of the 1MDB Task Force and the MACC Operations Review Panel, told Asia Sentinel.

Malaysian state prosecutors have applied to a Malaysian court for “a discharge not amounting to an acquittal” on several charges related to 1MDB, the Malaysian Anti-Corruption Commission (MACC) announced on May 14. The dropping of charges is conditional upon Riza returning roughly US$108 million of assets stolen from 1MDB to the government. Riza was charged with five money-laundering offenses for his role in the laundering of US$248 million of 1MDB funds.

The court hearing this case has the power to impose a penalty of up to five times the US$248 million laundered in this case, which would be US$1.2 billion, said Thomas in a statement on May 18.

“We would have sought this sum upon his conviction,” added Thomas, who resigned as attorney general when the Pakatan Harapan government fell in late February.

The timing of Riza’s “discharge not amounting to acquittal” (DNAA) is “bizarre”, said Thomas’ statement. In civil and criminal proceedings which proceed to trial, the prosecution loses substantial leverage if it withdraws a court proceeding before the terms of settlement are completely performed, the statement added. “Hence, one needs to question why Riza has been given a DNAA so prematurely.” 

"We are of the view that the 1Malaysia Development Berhad (1MDB) case linked to Riza Aziz, who was let off with a discharge not amounting to an acquittal, is a sign that several other big cases involving political leaders would also reach the same settlement," said a statement on May 17 by the opposition Pakatan Harapan, Parti Pribumi Bersatu Malaysia and the Sabah Heritage Party (Warisan).

These three political groups were part of a coalition that defeated Barisan Nasional, the party which had ruled Malaysia for decades, in elections on May 2018. The surprise election outcome resulted in Mahathir Mohamad replacing Najib as Prime Minister.

The plan to drop charges against Riza “is very disturbing” and opens the path for charges against Najib and Rosmah to also be dropped, Xavier Justo, a 1MDB whistleblower, told Asia Sentinel. “And that is morally unacceptable.”

Najib is on trial for 25 charges related to 1MDB. Rosmah faces over 10 money laundering and tax evasion charges, plus two corruption charges over a solar power project.

Justo, a Swiss ex-banker, provided information to media outlets like the Sarawak Report which publicized the 1MDB scandal. He and his family fled Malaysia for Switzerland in early March, days after Muhyiddin Yassin replaced Mahathir as Prime Minister, because Justo said he no longer felt safe under the new Malaysian government where Barisan Nasional holds the most seats.

Mahathir weighed in on the issue with a video posted on his Facebook on May 15, headlined, “My comment on the individual who has been released without being freed.” Riza’s name and images appeared in the video.

Without naming anybody, Mahathir spoke in Malay in the video, “So would it be in future, if there is a thief, he steals money, and then gets caught, is brought to court, he says, ‘Never mind, I give back the money that I stole’. It can’t be that we say, ‘OK, OK lah, we take the money,’ and he is released.”

“I am not questioning the judge’s decision, definitely it follows the law, but I am concerned because there are many more thieves in this country of ours, if we hold on to this principle, thieves will get away,” said the 94-year old former prime minister. “I’m afraid that if I speak like this, I will be cited for contempt of court. I apologize to the judges, it is not my intention to criticize judges.”

It is the necessity for clear and comprehensive guidelines over the exercise of prosecutorial discretion and any settlement, said Lim, a former president of the Malaysian Bar, who pointed out that in the UK, on which Malaysian law is modeled, there are guidelines and protocols issued by the Crown Prosecution Services and Serious Fraud Office on their exercise of prosecutorial discretion and settlement.

“We need this in Malaysia so that the public knows how cases are to be prosecuted and settled.

This gives rise to the certainty of outcome and confidence in consistency of application of the law.

Despite this recent outcry, I continue to have faith and confidence in our present attorney general to do the right thing and continue with the good work of his predecessor,” Lim added.

The current Malaysian Attorney General, Idris Harun, succeeded Thomas, who was appointed attorney general in June 2018 by Mahathir to vigorously pursue the 1MDB case.

Former Malaysian Attorney General’s denials

Although the MACC said on May 14 that the agreement between the prosecution and Riza was agreed to by Thomas, the former attorney general has repeatedly denied it. On May 16, he issued a statement denying he approved the deal with Riza for the second time. His statement said, “After I corrected MACC’s false statement on the evening of 14th May, MACC responded by stating that they stood by their first statement.  This is absolutely shocking because MACC were continuing with the lie after the truth had been pointed out to them.”

In a press release of the Malaysian Attorney General’s Chambers on May 17, Idris said he agreed to the deal to drop charges against Riza after learning Thomas had agreed to this deal “in principle”.

On May 18, Thomas issued another statement, saying, “Since Tan Sri Idrus is at pains to emphasize the weight he gave to my so-called ‘agreement in principle’ (which itself is a fiction), let me state publicly that I would have never sanctioned this deal. I would have lost all credibility in the eyes of the people of Malaysia.”

Thomas’s statement on May 18 said Riza is not offering to pay any new money other than assets already seized by the US Department of Justice (DOJ) since the US$108 million would, in any event, be returned by DOJ to Malaysia.

“Thus, Riza is unnecessarily getting credit for returning monies that are not his. Hence, it is a sweetheart deal for Riza but terrible for Malaysia,” added Thomas.

In an embarrassing slip, the Malaysian Attorney General’s Chambers press release of May 17 said Riza offered to surrender a house in Beverly Hills, an apartment in New York and a townhouse in London as part of the US$108 million of assets to be returned to the Malaysian state. But these properties had already been surrendered to the FBI, reported the Sarawak Report, a London-based whistleblower blog. This means virtually all the assets that Riza offered to return to the Malaysian government was already surrendered to the US authorities, the Sarawak Report said.

Political volatility

The controversy over Riza comes amidst great political uncertainty in Malaysia, with anybody’s guess how long the current prime minister Muhyiddin will remain in power. Mahathir has applied to file a no-confidence motion in Parliament, which was originally scheduled to be discussed on May 18. But that has been delayed till July after the scheduled May 18 session was shortened to one day from the originally planned 15 days. At the Parliamentary session on May 18, only the Malaysian king gave a speech but no politician was allowed to speak.

At a press conference in Kuala Lumpur on May 18, Mahathir complained, “We cannot accept the reasoning that because of the pandemic we can only meet for two hours … This will spell the end of democracy, as we cannot speak as representatives of the people.”

If two or three MPs (Members of Parliament) switch parties, he said, “then this government will collapse.”

Of 222 seats in the Malaysian Parliament, Muhyiddin’s ruling coalition, Perikatan Nasional, has a majority of only three seats.

Toh Han Shih is a Singaporean writer in Hong Kong.