Court rejects Najib's bid to set aside Mareva injunction in 1MDB suit

The Kuala Lumpur High Court has dismissed Najib Razak's bid to set aside the Mareva injunction obtained by 1MDB and one of its subsidiaries to prevent him from disposing of or reducing the value of any of his assets in Malaysia amounting to US$681 million.

Judge Atan Mustaffa Yussof Ahmad today ruled that the injunction should be retained until the end of the 1MDB suit.

A Mareva injunction is an order preventing someone from disposing of property pending the outcome or completion of a legal action.

On Feb 8 last year, the court granted an ex-parte application for a Mareva injunction by 1MDB and Global Diversified Investment Company Limited (formerly known as 1MDB Global Investments Limited), who are the first and fifth plaintiffs in the suit against Najib and several other individuals.

The injunction also limits Najib from withdrawing no more than RM100,000 per month for living and legal expenses, and if more is required, he would need to get written permission from the lawyers of 1MDB and Global Diversified.

In his ruling, Mustaffa said that the court finds that the plaintiffs (1MDB and its subsidiary) have a good arguable case against the defendant (Najib), that he has assets within the jurisdiction, and that there is a risk of the assets being removed or dissipated before judgement could be satisfied.

The judge also contended that the plaintiffs have complied with Order 29 Rule 1(2A) of the Rules of Court 2012 in fulfilling the duty to make full and frank disclosure to this court at the time they made their ex parte application.

"Najib, as a shadow director, owes the plaintiffs the same fiduciary duties as a formal director. These duties include acting in good faith, being honest, and not advancing personal interests over the company's interests," he said, adding that Najib breached these duties by diverting funds, particularly siphoning US$681 million from the US$3 billion bonds, into his personal account.

The judge also said that the plaintiffs have demonstrated that Najib, while serving as prime minister and finance minister, had committed misfeasance in public office by abusing his authority.

"Specifically, he directed the creation of the 2013 bonds, which resulted in the misappropriation of US$1,592,311,599, including a transfer of US$681 million to his personal account. This was done with either malicious intent or reckless indifference, causing harm to the plaintiffs and the public," said the judge.

Mustaffa also pointed out that Najib had previously given "inconsistent" accounts about the sum of RM114 million seized by authorities at Pavilion Residences after the 2018 general election, and Najib had alleged that the RM114 million was held in trust for Umno.

"If the funds were genuinely held in trust for Umno, the defendant, who was no longer the party president, should have taken steps to transfer the funds to the party. Instead, evidence shows that the money was received by his representative, indicating personal custody rather than fiduciary responsibility," he said.

The judge said Najib also failed to make full disclosure of his assets, as required under the terms of the injunction.

"A critical analysis of his conduct, particularly his failure to make complete asset disclosures, demonstrates a blatant disregard for the procedural obligations of these proceedings," he said, and he ordered Najib to pay costs of RM20,000 to the entities.

The five plaintiffs in the suit were 1MDB, 1MDB Energy Holdings Limited, 1MDB Energy Limited, 1MDB Energy (Langat) Limited, and Global Diversified Investment Company Limited.

And named as defendants were Najib, 1MDB's former deputy chief financial officer and executive finance director Terence Geh Choh Heng, former general counsel Jasmine Loo Ai Swan, executive director of business development Casey Tang Keng Chee, former director of investments and chief investment officer Vincent Beng Huat Koh, former chief financial officer and subsequently chief operating officer Radhi Mohamad, former director of investments Kelvin Tan Kay Jim, and former chief investment officer Nik Faisal Ariff Kamil.