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Former Malaysian prime minister,Najib Razak, has been sentenced to jail:12 years for abuse of power and 10 years for each of six counts of money laundering and breach of trust by a court in Kuala Lumpur . The sentences – to run concurrently meaning Najib will serve 12 years in prison – have however been suspended following an appeal.

His conviction comes after the high court ordered him to pay the government as much as 1.6 billion ringgit($400m) in unpaid taxes and penalties covering the years from 2011-2017

Najib, held the dual posts of prime minister and finance minister until he was voted out of office in 2018. He is the first Malaysian leader to be convicted of corruption.

The verdict against Najib centered on his role in diverting an estimated 42 million ringgit ($9.87m) from SRC International, a unit of 1MDB sovereign wealth fund– 1Malaysia Development Berhad set up in 2009– into his personal bank accounts.

Najib maintains his innocence claiming he was misled by financial advisers –in particular fugitive financier Jho Low,who has been charged both in the US and Malaysia. Najib alleges he was led to believe that the funds in the account were donated by the Saudi royal family. Jho Low also maintains his innocence.

Other accusations

A separate trial that began last August looks at accusations that the former prime minister illegally obtained 2.28bn ringgit ($550m) from 1MDB between 2011 and 2014.

A the third case, which started on November 18, relates to the alleged abuse of power and cover-up of an audit report at 1MDB.

Two more trials are also pending.

His wife, Rosmah Mansor, also faces money-laundering and tax evasion charges, to which she has pleaded not guilty.

The 1MDB scandal

A sovereign wealth fund is a state-owned investment fund or entity which comprises of pools of money derived from a country’s reserves. Reserves are funds set aside for investment to benefit the country’s economy and its citizens.

In 2015, questions were raised around 1MBD’s activities after it  failed to make payments to banks and bondholders. Malaysian and US authorities allege that $4.5bn was misappropriated and diverted into private pockets and the missing money has been linked to luxury real estate, a private jet, Van Gogh and Monet artworks – and even a Hollywood blockbuster, the Wolf of Wall Street.

Last week, US bank Goldman Sachs reached a $3.9bn settlement with the Malaysian government for its role in the multi-billion-dollar corruption scheme.

The deal resolved charges in Malaysia that the bank misled investors when it helped raise $6.5bn for 1MDB

 

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