AG clears Najib of wrongdoing in US$681m donation scandal

Kuala Lumpur

MALAYSIAN Prime Minister Najib Razak did not commit any criminal offence in the now infamous case of the US$681 million donation, Attorney-General Mohamed Apandi Ali declared on Tuesday. He also cleared the PM of wrongdoing in another indirect transfer of RM42 million (S$14 million) from state-owned SRC International to his personal bank account.

Mr Apandi's findings - that the US$681 million (RM2.6 billion at the time) transferred into Mr Najib's personal bank account between March 22 and April 10, 2013 was a "personal donation" from the Saudi royal family and given without any consideration - were greeted with derision. Furthermore, he asserted that US$620 million had been returned "because the sum was not utilised".

Amid cynicism and distrust in key institutions among the public, the AG's decision did not come as a surprise given the manner in which official investigations have been undertaken in the past 18 months, and the fact that Mr Apandi was unexpectedly appointed to the position in the middle of last year after his predecessor Gani Patail was suddenly boarded out on health grounds.

The decision therefore prompted widespread disparagement, and the trust deficit in Mr Najib and his administration will only deepen.

Notwithstanding the AG's reprieve, another controversy involving state-controlled Lembaga Tabung Haji (LTH) or The Pilgrims Fund on Tuesday underscored the perception of mismanagement within the government or its agencies.

Leaked letters revealed last December that Bank Negara Malaysia (BNM) had brought up the issue of LTH's negative reserves, owing to dividend payouts that were beyond its means. BNM governor Zeti Akhtar Aziz warned that the financial system could be affected if LTH depositors lost confidence or if LTH was forced to dispose of its assets cheaply to meet its obligations.

Mr Najib had spent the greater part of last year shoring up political support and fire-fighting in the wake of the RM2.6 billion deposit scandal, state-owned 1MDB's huge financial mess, the neglect of the economy and increasing frustration at soaring prices. The distrust has also weakened the ringgit.

Satisfied that no crime was committed, Mr Apandi announced at a media conference on Tuesday that "there is no necessity for Malaysia to make a request for mutual legal assistance to any foreign states for the purpose of completing any criminal investigation by the MACC (Malaysian Anti-Corruption Agency) in relation to the RM2.08 billion donation".

Many went online to vent their disbelief. "We are expected to believe in more and more ridiculous revelations. First, it's hard to believe that anyone in his right mind would donate a whopping RM2.6 billion. Then we are now to believe that the donation was returned to the donor by Najib because it was not used," posted James1234 online.

Others questioned why key figures in the 1MDB scandal continued to hide abroad, and why former deputy prime minister Muhyiddin Yassin had been sacked last July if everything was above board. "So Cabinet ministers including DPM sacked for nothing?" asked Cyber.

On the government's guarantee of a RM4 billion loan to SRC by the Civil Servants' Retirement Fund, Mr Apandi said that there was no evidence that Mr Najib had abused his position to get Cabinet approval for the guarantee.

Moreover, the AG said that there was no evidence to show the PM had any knowledge the monies had been transferred into his personal account or had approved the transfer from SRC.

"Evidence shows that at all material times YAB PM was of the belief that all payments which were made by him were made from the donation received from the Saudi royal family, which was earlier transferred to his personal accounts,'' Mr Apandi said.

Whistle-blower website Sarawak Report had earlier alleged a shopping spree involving SRC credit cards.

"Based on the facts and evidence as a whole, I, as the public prosecutor, am satisfied that no criminal offence has been committed by YAB PM in relation to the three investigation papers," Mr Apandi said, adding that the investigation papers would be returned to the MACC with instructions to close the papers.

In response to the leaked letters, BNM said tha LTH has "proactively taken appropriate measures to further strengthen its risk management practices, both on its own initiative and in response to earlier engagements with the Bank".

LTH meanwhile insisted that BNM's letters were taken out of context, and assured its nearly nine million depositors that their savings are safe. It plans to announce its payouts in early February after undertaking its annual internal processes and interim audits.