Malaysian Court Rejects ex-PM Najib’s Request to Stay Bankruptcy Order

The Kuala Lumpur High Court on Monday refused to stay bankruptcy proceedings against former Malaysian Prime Minister Najib Razak for allegedly failing to pay 1.7 billion ringgit (U.S. $413 million) in taxes, saying all citizens are equal under the law.

Separately, an appeals court is scheduled on Wednesday to hear Najib’s plea to dismiss a 2020 high court ruling ordering him to pay those taxes, from 2011 to 2017.

“As every taxpayer, like every citizen, stands equal before the law, and if this stay is granted to the defendant, who is a former prime minister and the former finance minister, the plaintiff will be stopped from filing any recovery actions against him,” Justice Ahmad Bache ruled.

“This court holds that, the defendant has no strong grounds for a stay of execution to be granted as the defendant had failed to discharge the burden of proving the existence of ‘special circumstances’ to the satisfaction of this court.”

Ahmad noted that ordering a stay on Najib’s bankruptcy proceedings may “set a poor precedent” and lead to an inference “that double standards are being allowed and being practiced.”

The judge said that Najib’s concerns that he would not be able to pay the amount sought and might lose his parliamentary seat if declared bankrupt did not warrant a stay.

“The grounds relied on by the appellants are nothing more than fear of losing. All that the applicant has to do to avoid such fears is to settle the judgment debt,” Ahmad said while proposing Najib discuss a payment plan with the Internal Revenue Board.

Under Malaysia’s election regulations, a person who is declared bankrupt, or has been sentenced to more than a year in prison and fined at least 2,000 ringgit ($486) would lose his/her seat in parliament.

In a post on his Facebook page, Najib said the ruling Perikatan Nasional (PN) government – which he is a part of – is trying to push him into bankruptcy.

“Even if PN succeeds, it does not mean that I will stop speaking up for the people – and no one said that a bankrupt status cannot be overturned in a short span of time because being bankrupt does not mean I am crippled,” he said.

Appeal hearing on Wednesday

Farhan Shafee, the lawyer representing the ex-PM, said the defense team was focusing on Wednesday’s appeal to outright quash the 2020 court ruling that ordered Najib to pay the back taxes.

“Because the substantive appeal on the order is this week on the 16th, we will proceed with those arguments first before deciding if we want to apply for a further stay from the Court of Appeal,” Farhan told BenarNews.

The government through the IRB had filed the suit against Najib on June 25, 2019, seeking a total payment of nearly 1.7 billion ringgit for unpaid income taxes from 2011 to 2017.

In July 2020, the Kuala Lumpur High Court ruled that Najib had to pay the amount.

Oh Ei Sun, a senior fellow at the Singapore Institute of International Affairs, said being declared bankrupt could help Najib’s image among his ardent supporters.

“He has been keeping his political flame [alive] burning by running a very sophisticated public relations campaign, and there is no sign that even a bankruptcy would stop him, especially when people now are desperate for some sort of – albeit somewhat half-baked – leadership in times of pandemic desperation,” Oh told BenarNews.

The former PM was convicted last year and sentenced to 12 years in prison on corruption-related charges in a trial over the looting of money linked to a subsidiary of sovereign fund 1MDB, but he is out on bail and appealing the conviction.

The appeal hearing ended in May, but the Court of Appeal reserved its judgment for an unspecified date. 

Najib is standing trial in another court on 25 charges of abuse of power and money laundering connected with 2.3 billion ringgit ($551 million) that went missing from 1MDB.

Malaysian and U.S. prosecutors had alleged that at least $4.5 billion (18.8 billion ringgit) was stolen from 1MDB between 2009 and 2014, in a corruption scandal that implicated foreign and local financial institutions and high-ranking officials, including Najib.