Najib: ‘Charitable’ Saudi king’s US$681m ‘donation’ to me not out of character, I returned US$620m when no political need for it

KUALA LUMPUR, Dec 10 — Datuk Seri Najib Razak today said the late Saudi ruler King Abdullah was a charitable man known for giving gifts, and insisted that US$681 million (RM2.081 billion) which entered his private AmIslamic bank account by April 2013 was yet another donation from the latter.

Najib, who is Malaysia’s former prime minister, said the alleged political donation from King Abdullah was in keeping with the then Saudi king’s character.

Testifying in his own defence in his 1Malaysia Development Berhad (1MDB) trial, Najib disagreed with the prosecution’s case that the US$681 million was part of US$3 billion in funds raised by 1MDB’s subsidiary 1MDB Global Investments Limited (1MDB GIL) through a bond.

Najib said he had always believed the US$681 million was instead donations from King Abdullah from his or Saudi Arabia’s funds that were transferred through Tanore Finance Corporation to Najib’s accounts.

He said there was a Saudi Arabia letter confirming that the alleged donation would come to him via Tanore, and said both AmIslamic Bank and Bank Negara Malaysia did not flag these money transfers as suspicious and did not ask him about the legitimacy of the alleged donations which he declared to them.

“In all events, I have always treated the funds received as a political donation pledged by the late King Abdullah and that was how I spent them, i.e. on political causes and charities.

“When there appeared to be no political need for the money, I have returned the unused sum i.e. US$620 million back to Tanore Finance Corporation, an entity which was represented to me to be controlled by King Abdullah,” he told the High Court, referring to the US$620 million (RM2.03 billion) sent out in August 2013.

Najib said he did not doubt that the US$681 million was genuinely a donation from King Abdullah, as he had relied on systems and safeguards in AmIslamic Bank and Bank Negara Malaysia and that he was not alerted of the “possible suspicious nature” of the money entering his accounts.

“In any event, I am aware that the late King Abdullah was known for his philanthropy, donations, and gift-giving.

“Even the common Arab men are known for their charitable nature, what more the King himself,” he said.

Najib also said he remembered Spain’s then ruler King Juan Carlos too had received US$100 million from King Abdullah in 2008 via Saudi Arabia’s Ministry of Finance.

“So, it was not out of character for King Abdullah to part with that kind of money.

“If I remember correctly, the Swiss authorities had probed into the remittances and had concluded in 2012 that there was insufficient evidence to show that the remittances were of a corrupt nature,” he said, referring to the 2008 US$100 million amount.

While saying that he did not know then that Tanore was a company registered in the British Virgin Islands (BVI), Najib today said it would be naive to think that Arab conglomerates would limit their investments to only the Middle East and that it would not be unusual for the Saudi ruler to have money in the BVI.

“In fact, the Gulf countries have been heavily investing in the United Kingdom in the hundreds of millions of dollars, ranging from properties, media companies, and even in banking institutions.

“It would not be out of the ordinary for funds controlled by King Abdullah to be spread out in banks and entities the world over, including the British Virgin Islands, which are a part of the British Overseas Territories,” he said.

Najib said he had relied on Bank Negara and other banks to flag any suspicious transfers of money into his bank account, saying that this was one of the reasons he opened a “local bank account under my personal name to receive the donation in Malaysia, where I would probably be ranked the highest in the list of politically exposed persons in Malaysia”.

“It was for transparency. Which was also the reason my political spending of the donations was transacted almost entirely through cheques,” he said.

Najib said he could have easily opened offshore bank accounts if he had “any corrupt motivation to pillage 1MDB money” but said he never did so.

“I would not have spent it on political and charitable causes and deprived myself of any benefits from the money. And I would most certainly not have returned 91 per cent of the money received from Tanore Finance Corporation back to Tanore Finance Corporation,” he said when indicating that his other actions showed that he did not have a corrupt intention to plunder 1MDB.

On the first day of the 1MDB trial, the prosecution had said it would show that money from the US$3 billion funds raised by 1MDB GIL flowed through various entities before reaching Tanore, and that Tanore had by April 2013 transferred US$681 billion to Najib's account.

Tanore is now known to be under the control of Eric Tan, an associate of Malaysian fugitive Low Taek Jho.

Najib is facing 25 criminal charges in the 1MDB trial, namely four power abuse charges and 21 money laundering charges.

One of his power abuse charges is in relation to the US$681 million, while nine of his money laundering charges are in relation to the same US$681 million sum and five money laundering charges are over the US$620 million sum he claimed to have returned.