The BGA Malaysia Team, led by Managing Director Hazree Turee, wrote an update to clients on the decision by Malaysia’s federal court to uphold former Prime Minister Najib’s conviction and jail sentence.

Context

  • Malaysia’s top court on August 23 upheld former Prime Minister Najib Razak’s conviction and 12-year jail sentence for involvement in the 1Malaysia Development Berhad (1MDB) financial scandal.The federal court dismissed Najib’s final appeal to overturn the jail term and MYR 210 million ($46.8 million) fine over the MYR 42 million (US$31.7 million) misappropriation of funds from SRC International Sdn Bhd.
  • Najib, 69, will be the first prime minister to serve jail time in Malaysia’s history, cementing his fall from grace. Najib still faces four additional charges of using his position to obtain bribes totaling MYR 2.3 billion ($512.4 million) from 1MDB funds and 21 charges of money laundering involving the same amount.

Significance

  • Najib’s conviction will hasten the call for Malaysia’s next general election. Prime Minister Ismail Sabri Yaakob’s party, the United Malays National Organization (UMNO), continues to pressure him into calling an election, hoping this will cool the country’s politically volatile atmosphere.
  • The power dynamic in UMNO is expected to shift in response to the political vacuum left by Najib’s removal. Najib’s removal could allow Ismail Sabri space to strengthen his position in UMNO and vie for the party’s presidency.

Implications

  • Companies should monitor signposts for an early general election, which must be held by September 2023. Najib’s conviction could accelerate the election timeline, with the possibility of a snap election called by the end of this year or early next year.
  • The court’s verdict restores some faith in Malaysia’s rule of law, which could bolster investor confidence.Najib’s conviction suggests that Malaysia’s judicial independence is intact and has not been compromised by political forces.

BGA will continue to keep you updated on developments in Malaysia as they occur. If you have any comments or questions, please contact BGA Malaysia Managing Director Hazree Turee at hturee@bowergroupasia.com.

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Managing Director

Hazree’s 25 years of business experience have spanned across many sectors, including consulting, sales, marketing and services. His work with large multinationals and government link companies helped him build an extensive network, especially in the government. Hazree has been involved in business development projects in industries like oil and gas, banking, supply chain and e-government. He has turned around troubled and complex projects with challenging policy, financial and technical problems. He has set up a cloud computing business and was the architect of Commerce dot Com’s Center of Excellence for Government Procurement. Hazree has vast experience in liaising with government ... Read More