This explainer was updated in August 2020 after Malaysia’s former prime minister Najib Razak was convicted in July 2020 of seven charges arising from his involvement in the multibillion-dollar 1MDB scandal.
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Najib was convicted on July 28, 2020 of one charge of abuse of power, three charges of money laundering and three charges of criminal breach of trust, completing a dramatic fall from grace for a man who led his country from 2009-18. During his years in charge, some US$4.5 billion was looted from the state investment fund. He was sentenced to 12 years in prison and fined US$49 million, derailing any immediate plans for a political comeback.
Although Najib has appealed and faces four more trials stemming from his role in the misappropriation of 1MDB funds, his conviction began to close the loop on a long-running saga of vast financial corruption and self-dealing that drew the gaze of the world to Malaysia.
Najib inherited a political legacy from his father and uncle who both served as prime ministers before him. Now, that legacy is in ruins. Instead he will be remembered as the face of a scandal that upended Malaysian politics, rupturing and remaking its shifting coalitions.
Former Malaysian Prime Minister Najib Razak and his wife, Rosmah Mansor. Photo: AP
How the 1MDB scandal happened
After becoming prime minister in 2009, Najib established the state-owned investment firm 1MDB as part of the government’s Economic Transformation Programme. He was also chairman of the fund and Malaysia’s finance minister.
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For years, the operation of 1MDB attracted scrutiny for a lack of transparency but the criticism intensified in 2015 after leaked documents gave rise to allegations of fraud, followed by a Wall Street Journal report that US$700 million had been transferred from 1MDB to Najib’s personal accounts.
