How one man bent the system

M Santhananaban

Malaysia is facing a deep crisis of governance and public trust.

It is difficult to resolve and it touches almost every part of national life. Will this become a lasting feature of Malaysian politics, as it has in some neighbouring countries?

And will there be deeper polarisation? Will religion be shorn of its spiritual power to express solidarity with humankind, turning instead into another source of division in our peaceful multi-ethnic society?

A former prime minister of Malaysia has now been convicted twice. Two different High Court judges have handed him heavy fines and long prison terms in two separate trials.

Both judges based their rulings strictly on the law – on the latitude the former prime minister gave himself, and the liberties he took in redirecting public funds for personal, private and political ends.

Justice Mohd Nazlan Ghazali delivered the first judgment in July 2020. Justice Collin Lawrence Sequerah delivered the second in December 2025, in the 1MDB-Tanore trial.

As detailed in the two rulings, their factual findings paint a troubling picture. While it must be noted that the 1MDB-Tanore verdict is currently subject to the ongoing legal appeal process, the two judgments raise a harder question than guilt or innocence – a question that arises from the evidence they examined: how did so much public money end up in the hands of one man, with almost no one in government able to stop it?

Najib was convicted and handed lengthy prison terms, along with combined fines from both cases totalling roughly RM11.6bn (comprising RM0.2bn from the SRC case and RM11.4bn from the 1MDB-Tanore case), plus an asset recovering penalty.

As Prime Minister, Najib was the most powerful person in the country, with influence that reportedly extended beyond its borders. Based on witness testimonies and documentary evidence presented during the trials, the assumption inside government, it seemed, was that whatever call he made was the right one.

This is captured starkly in paragraph 403 of Justice Sequerah’s judgment.

Bakke Salleh, who chaired the 1MDB board from August to October 2009, had raised a reasonable question about earlier fund disbursements.

Instead of answering, Jho Low reportedly handed Bakke his phone and said: “PM on the line. Wants to speak to you” – or words to that effect.

Bakke took the call.

The prime minister spoke of focusing on a new investment rather than past matters, framing it as an urgent government-to-government deal. As recorded in the court’s narrative, it appeared be a clear show of how much authority Najib held as the country’s most powerful figure.

It is not hard to imagine how the 1MDB chairman felt. His resignation within a month is understandable in this context.

As the trial evidence illustrates, that single phone call sums up how the system worked – or failed to. A legitimate question, asked by the chairman of the board, was overridden by a one-line call from the very top.

The evidence presented in court shows how an entrenched and powerful leader could wield such sweeping authority – and how he used it to bypass not only the law, but basic logic, decency and discretion.

Court testimony indicated he had more than the trappings of power. He had the presence and gravitas to brush off any dissenting voice, including from within his own cabinet. He was able to dismiss the concerns of his second finance minister, Husni Hanadzlah, over 1MDB’s operations.

The findings contained within the two court judgments establish that he engaged in deception, corruption, fraud and other criminal conduct. As the judgements demonstrate, these abuses were possible because the institutional safeguards meant to stop them simply gave way under the weight of the enormous power he held.

It appeared that Najib had the tacit help of senior officials, including at the finance ministry and the central bank, in sustaining these activities. But, according to the evidence presented, the biggest enabler of all was someone entirely outside government who was informally allowed into the heart of decision-making.

Power without portfolio

Low Taek Jho, better known as Jho Low, did not hold any public office. Yet, Yet, according to multiple witness accounts and court exhibits, he could apparently talk down to the most senior officials in the Najib administration.

If anyone disagreed with him, he could reportedly call the prime minister on the spot and have his view prevail.

This pattern, as inferred from the court’s account, reflects a striking disregard for proper procedure, especially on decisions with major financial or security implications.

The fact that a valid legal objection could simply be overruled suggests those officials with some courage had little room to resist. Based on the conduct documented in the judgments, it would seem Najib and his associates believed, with total confidence, that they could carry out such conduct without consequence.

Where does that kind of confidence come from? The judgments do not explicitly answer this sociological question, but it prompts critical reflection: is it bred by either an unaccountable “deep state” or by an administrative culture that tolerates such conduct as a normal part of how things get done? Or is it simply accepted as one of the costs of running an otherwise successful nation?

Najib is not alone. In a separate, unrelated case, another veteran politician, Isa Samad, saw his final legal avenue exhausted when the Federal Court dismissed his review application, upholding his prison term for a serious corruption offence. This too underscores broader governance challenges.

Vetting and security clearance

Sensitive, public-interest work normally requires proper vetting and security clearance. Court evidence raised questions over were whether these procedures were followed when Jho Low and Nik Faisal Nik Kamil became involved in 1MDB’s affairs? Can a prime minister hold the authority to unilaterally decide that protocols and procedures do not apply? This is a concern that has been widely voiced by others.

In Najib’s case, the evidence points to Jho Low as the central conduit in the 1MDB affair. He is reportedly still missing. So too is Nik Faisal.

Jho Low appears to have operated almost like a shadow figure – present at key moments, yet leaving little paper trail. Still, based on the court’s tracing of fund, he appeared to be a principal beneficiary of vast sums of public money.

That is the puzzle at the heart of this case: how could so much be funnelled to one person with so little oversight? The court’s reconstruction of events suggest that the normal functions of the finance, foreign affairs and trade ministries were sidestepped.

A PM’s discretion

The two High Court judgments make clear that there are limits to prime ministerial power – and that Najib breached them. His handling of both the SRC and 1MDB matters shows a clear focus on his own financial interests, as established by the judicial findings.

As prime minister, he also had a hand in shaping leadership across key institutions, including the judiciary and civil service. He could appoint board members to government-linked companies (GLCs) and investment companies (GLICs), which together control roughly 40% of the equity in Malaysia’s listed firms.

Public interest naturally calls for greater transparency on how exactly he chose people for these roles. Some of these companies, including FGV, have faced significant public and regulatory scrutiny in recent years.

GLCs sometimes seem to function more like ‘governance-lacking concerns’. Officials with no real stake in the outcome, no record of entrepreneurial success, and a tendency to defer to their political masters are rarely the most suitable people to run these firms.

Cases involving KWAP, Bank Pembangunan and other GLCs, seen in the broader context, have seen huge sums lost through mismanagement, according to public parliamentary reports and audit findings.

Given the court’s explicit findings on how prime ministerial power was misused, Malaysia cannot keep entrusting business decisions to whoever happens to be prime minister – a reality brought into sharp relief now that two lengthy, well-reasoned court judgments against Najib have become public record.

Becoming prime minister does not automatically turn a politician into a skilled judge of entrepreneurial talent or a capable manager of industry.

Bumiputra Merchant Finance in Hong Kong, Perwaja Steel and 1MDB are all examples of GLCs that failed, leaving the public to bear the debt. This is a recurring pattern that is now a matter of public record.

This cannot continue. Any future government should seriously consider staying out of risky, entrepreneurial ventures altogether.

Malaysia needs to move forward. It should build on its real strengths – diversity, a strategic location, Asean centrality, natural resources and a talented workforce – rather than dwelling on slogans from the past, whether Vision 2020, Hadhari or 1Malaysia.

In the light of the systemic failures exposed by these trials, future leaders will need to be far more vigilant in safeguarding the country’s institutions, ensuring that oversight remains robust while the judicial process runs its full and final course.

Dato’ M Santhananaban is a former ambassador with 45 years of public sector experience.

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