Malaysia ex-PM Najib 'pivotal' in 1MDB plunder, trial hears

Malaysia's ex-prime minister Najib Razak played a pivotal role in plundering state fund 1MDB and hundreds of millions of dollars were illicitly channelled to his bank account, a prosecutor said Wednesday at the opening of his biggest graft trial.

Claims that Najib and his cronies pilfered massive sums from the fund and spent it on everything from real estate to artwork contributed to the defeat of his long-ruling coalition to a reformist alliance.

After losing power last year, the former prime minister was arrested and hit with dozens of charges related to 1MDB. He is expected to face several trials.

The first started earlier this year but Wednesday's is the biggest, with Najib accused of 21 counts of money-laundering and four of abuse of power, centring on allegations that he illicitly obtained 2.28 billion ringgit (USD 540 million) from 1MDB.

Opening the trial, lead prosecutor Gopal Sri Ram said that Najib used an "elaborate charade" and played a "pivotal role" in plundering 1Malaysia Development Berhad, a fund established with the ostensible aim of boosting Malaysia's economy.

"His objective was to enrich himself," the prosecutor told the packed High Court in Kuala Lumpur, as he outlined how 1MDB funds were channelled in a "circuitous route" between 2011 and 2014 to Najib.

Najib -- who was also finance minister -- put himself in "sole control" of the fund's important affairs and used his position "to exert influence over the board of 1MDB to carry out certain abnormal transactions with undue haste", he said.

In August 2013, over two billion ringgit was sent to Najib's account at a Malaysian bank before it was quickly transferred out again, according to the prosecutor.

When news emerged of the looting, Najib sought to cover his tracks by producing "sham" documents that claimed the money was a donation from an Arab prince, Gopal said.

"The accused took active steps to evade justice," he added.

The court also heard the former premier was the "mirror image" of fugitive financier Jho Low, who has been charged in both Malaysia and the United States, and the two men "acted as one" when it came to their dealings with 1MDB.

Low, a chubby, bespectacled Malaysian jet-setter known for partying with Hollywood A-listers, held no official positions at 1MDB but exerted huge influence over its operations.

The case relates to a crucial part of the 1MDB saga. When reports surfaced in 2015 that huge sums linked to the fund had flowed into Najib's bank account, it dramatically ratcheted up pressure on the leader and he became increasingly authoritarian.

The attorney-general later cleared Najib of any wrongdoing, saying the money was a personal donation from the Saudi royal family, and closed down domestic investigations.

The 66-year-old, who was in court for the start of the trial, denies all the charges.

Speaking after Wednesday's proceedings, lawyer Muhammad Shafee Abdullah said Najib "has been misled. Jho Low himself has misled many people, has misled the bank and misled 1MDB".

Najib faces up to 20 years in jail for each of the abuse of power charges and five years in jail for each of the counts of money-laundering.

Four witnesses testified at Wednesday's hearing, including three government officials and the former director of a digital services company paid to manage Najib's online presence.

Prosecutors wrapped up their case Tuesday in Najib's first trial, which involves the theft of 42 million ringgit from a former unit of 1MDB. The judge will rule in November whether it is strong enough to continue.

The US Department of Justice, which is seizing assets in America allegedly bought with looted 1MDB money, believes that USD 4.5 billion was stolen from the fund.