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2021 MarsdenLR 2894
HIGH COURT MALAYA KUALA LUMPUR
PP – Appellant
Versus
MOHD NAJIB HJ ABD RAZAK & ORS – Respondent
[Criminal Application No: WA-44-77-05/2019]
Failure to prove predicate offences precludes asset forfeiture under the Anti-Money Laundering Act.
Headnote:(A) Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 – Sections 56(1), 61(2), 61(4), and 63 – Application to forfeit properties as proceeds of unlawful activities linked to 1MDB – The applicant failed to prove predicate offences under ss 49 and 411 of the Penal Code leading to insufficient evidence for property seizure – Legal definitions and prior case law clarify the burden of proof in forfeiture applications. (Paras 30, 36, 41, 47)
(B) Burden of Proof – The applicant bears the burden to demonstrate that properties seized are proceeds from unlawful activities, necessitating credible evidence linking the properties to established offences. (Paras 36, 40)
Facts of the case: The applicant sought to forfeit various properties as proceeds of unlawful activities linked to 1 MDB, asserting that the 1st respondent orchestrated significant financial irregularities benefitting from public funds meant for development projects. (Paras 1, 2, 3)
Findings of Court: The court determined that the applicant failed to establish the necessary predicate offences to substantiate the forfeiture request, concluding that mere movements of funds without clear proof do not satisfy the statutory requirements for forfeiture under the Act. (Paras 36, 41)
Issues: The main issue was whether the properties seized were tied to illegal proceeds from established unlawful activities as defined under the Act. (Paras 29, 41)
Ratio Decidendi: The court emphasized that substantial proofs, rather than mere presumptions, must support forfeiture actions in alignment with statutory provisions requiring a direct connection between alleged unlawful actions and the properties in question. (Paras 36, 40)
Result: The applicant's motion for forfeiture was denied due to insufficient evidence linking the seized properties to unlawful activities.
JUDGMENT
Introduction
[1] The applicant, through the Amended Notice of Motion, seeks to forfeit the properties of all eighteen respondents under ss 56(1) and 61(2) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 ('the Act').
[2] It is the applicant's case that the properties that they sought to forfeit are proceeds of unlawful activities committed by the 1st respondent and several other entities concerning the affairs of a company known as 1 Malaysia Development Berhad '(1MDB)'. The properties sought to be forfeited range from cash, handbags, watches, monies in bank accounts, vehicles and land.
[3] Ten of the eighteen respondents resisted the application. Eight of them, namely the 6th, 9th, 10th, 11th, 12th, 16th, 17th and 18th respondents, have not responded to the applicant's application. The 3rd respondent, however, had consented to the items under paragraph A(3) of the Amended Notice of Motion to be forfeited. The consent order was recorded on 19 May 2020. The items forfeited were RM537,000.00, Pound Sterling 2,700.00 and Sri Lankan Rupee 2,870,000.00.
Background
[4] The applicant's application, filed on 3 May 2018, adhered to the requirement under s 56(1) of the Act, as it was within twelve months from the date that the properties of all the respondents were seized. The third-party notice prescribed under s 61(2) of the Act had also been published in the Government Gazette on 1 October 2020. No third party had come forward to stake a claim on the properties seized, although the applicant contended that the respondent's claim on the properties was akin to that of a third party, an issue I shall address in this judgment.
[5] The application under s 56(1) of the Act was premised on the contention that there has been no prosecution or conviction for an offence against any of the respondents under s 4(1) of the Act and that the properties seized were the proceeds of unlawful activities. The unlawful activities were allegedly committed by the 1st respondent, who was previously the Prime Minister of Malaysia, and several other entities. The prosecution had, in its affidavits, sought to elaborate the events that they claim culminated in the offences committed by them.
The Applicant's Case
[6] The facts that I shall narrate were based on the investigations conducted by the relevant authorities and elaborated through several affidavits by the applicant.
[7] The 1st respondent was at the material time the Chairman of the Board of Advisors of 1MDB. He was also the Minister of Finance as well as the Prime Minister 1MDB is wholly owned by the Ministry of Finance Incorporated, which was under the direct control of the 1st respondent.
[8] 1MDB had, on 26 September 2009, entered into a joint venture with Petrosaudi International Limited ('Petrosaudi International'), a company based in Saudi Arabia. A joint venture company between them was formed and named 1MDB Petrosaudi Limited ('1MDB Petrosaudi').,
[9] 1MDB entered into another joint venture with Petrosaudi Holdings (Cayman) Limited ('Petrosaudi Cayman') and 1MDB Petrosaudi. 1MDB agreed to acquire a 40% equity in 1MDB Petrosaudi for US$1 billion. Petrosaudi Cayman, in turn, decided to inject its assets valuing US$1.5 billion for a 60% stake in 1MDB Petrosaudi.
[10] 1MDB did the following transactions on 30 September 2009:
(a) US$300 million was credited into 1MDB Petrosaudi's account no 7619400 in JP Morgan, and
(b) US$700 million was credited into Good Star Limited's ('Good Star') account no 11116073 in RBS Couts Bank Limited, Switzerland ('RBS account').
[11] The applicant claimed that an individual named Low Taek Jho ('Jho Low') was the only signatory for Good Star's RBS account and that Good Star had no relationship with the joint venture between 1MDB and Petrosaudi Cayman. The applicant claimed that the transactions alluded to earlier were against the approval of 1MDB's board of directors and Bank Negara Malaysia (the Centr
