Najib Says He Can’t Afford RM50 Million Fine. So What Happened To The RM2.6 Billion He Received?

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Former prime minister Datuk Seri Najib Razak, currently incarcerated at Kajang Prison, says he doesn't have enough personal money to pay the RM50 million fine required for him to serve the rest of his sentence under house arrest

Speaking to reporters last week, Najib's lawyer Tan Sri Muhammad Shafee Abdullah said his bank accounts remain frozen because of his criminal cases, and that a large portion of the RM2.6 billion once deposited into Najib's accounts had been "returned to the sender".

When asked where the billions went, he said those questioning it had not been following the developments in Najib's court cases, reported Malaysiakini.

However, Shafee saying the money was "returned" does not tell the full story of what happened to it afterwards.

First, let's look at the RM2.6 billion itself

The widely quoted RM2.6 billion refers to about USD681 million that was transferred into Najib's personal account in 2013.

In a forfeiture complaint, the US Department of Justice (DOJ) described the transfer to "Malaysian Official 1" between March and April 2013, with the funds coming from Tanore Finance Corporation, which had received money from the 2013 1MDB bond proceeds.

According to the Kuala Lumpur High Court judgment in December last year, USD681 million moved from Tanore into Najib's AmIslamic Bank account in nine transactions between 22 March and 10 April 2013, worth RM2,081,476,926 at the time.

The DOJ said the Tanore money was diverted from the USD3 billion 2013 bond issue through a chain of offshore entities and funds.

The High Court convicted Najib on four abuse-of-power charges and 21 money-laundering charges over the 1MDB funds, and sentenced him to 15 years in prison. Najib is appealing the conviction and sentence.

Yes, he "returned" USD620 million, but to Tanore

The High Court found that Najib instructed the bank on 30 July 2013 to send money back, and five transfers between 2 and 23 August 2013 came to about RM2.034 billion, or USD620 million. But the money went back to Tanore, the same entity it came from, not to a Saudi royal.

Najib's explanation at the time was that it was a "political donation from the Saudi royal family" and he had "returned" the unused balance after the 2013 election.

However, the High Court rejected that "Arab donation" defence, with Judge Datuk Collin Lawrence Sequerah concluding that the "Arab Donation narrative is not meritorious", that the donation "letters were forgeries", and that the evidence pointed unmistakably to the fact that the monies were derived from 1MDB funds.

What happened after the money went back to Tanore?

The DOJ traced part of the USD620 million through further accounts controlled by Eric Tan and Jho Low, who masterminded the multi-billion ringgit 1MDB scandal. Part of it paid for a USD27.3 million pink diamond pendant and necklace for the wife of Malaysian Official 1, with payment made on 10 September 2013.

Tanore was also a conduit for other 1MDB money.

The DOJ said it bought about USD137 million worth of artwork, including Jean-Michel Basquiat's Dustheads. That's the broader pool of money moving through Tanore.

What stayed in Najib's account?

The High Court found that RM22.649 million of the Tanore funds went out in five payments between 2 and 14 August 2013: RM20 million to UMNO, RM100,000 to UMNO's Batu Kawan division, RM246,000 to Lim Soon Peng, RM2 million to ORB Solutions, and RM303,000 to Semarak Konsortium Satu.

According to the judgment, ORB Solutions was described as managing Najib's social media accounts and blog, and Semarak as providing publicity and English speechwriting services.

A further RM161.4 million was moved into another personal account of Najib's on 27 and 30 August 2013.

So, where did the RM2.6 billion go?

According to the High Court's accounting, of the RM2.081 billion that came in, about RM2.034 billion went back to Tanore, RM22.649 million was used for the aforementioned five payments, and RM161.4 million went to another personal account, of which RM11.4 million was identified as Tanore money.

What went back to Tanore was then traced by the DOJ into further transactions, including the diamond purchase.

That means Shafee's statement does not establish that the money vanished. His claim is that Najib can't personally access enough funds for the RM50 million fine because his accounts are frozen and much of the original money was returned. Whether the money was returned is one question, and where it went afterwards is another.

Don't confuse this with the RM31.3 billion recovered

Earlier this month, the Finance Ministry said that Malaysia has recovered RM31.3 billion through 1MDB asset recovery efforts.

It put the total 1MDB obligations borne by the government at RM51.4 billion, of which RM42.5 billion has been paid, and RM8.9 billion remains outstanding.

That covers the whole 1MDB scandal, including assets and settlements, and shouldn't be described as the recovery of the RM2.6 billion from Najib's account.

Meanwhile, the Najib Razak solidarity fund has raised RM9.25 million as of Sunday, 27 September

This is according to Datuk Seri Dr Ahmad Zahid Hamidi, who told The Star over the weekend that the collected funds are "still insufficient to reach the RM50 million target".

The solidarity fund was launched by UMNO on 18 September.

"The amount must be settled before the house arrest can be fully implemented," he said.