Highlights: Former Malaysian premier Najib talks about 1MDB scandal, seized assets

LANGKAWI, Malaysia (Reuters) - Former Malaysian prime minister Najib Razak sat down with Reuters reporters for his first sit-down interview since his shock May 9 election defeat, and talked extensively about the 1MDB scandal, the hundreds of luxury handbags and other assets seized from him by the Malaysian authorities, and how he is coping with the investigation.

Malaysia's former prime minister Najib Razak speaks to Reuters during an interview in Langkawi, Malaysia June 19, 2018. REUTERS/Edgar Su

See below some of the highlights from the interview.

On the 1MDB scandal:

“I didn’t benefit from 1MDB, because I believe that the 1MDB was created to do something good for the country.

“If I knew there was going to be misappropriation of funds, if that was my knowledge, I would have acted.”

On whether he blames the 1MDB board for the fund’s troubles:

“No. I am saying as a general principle, if they are in the know that something is not right, then it is incumbent upon them to tell me... It is the fiduciary duty of the board and the management to do the right thing. I expect them to do the right and to follow the law.”

On Mahathir’s comments in a Reuters interview that Najib was totally responsible for 1MDB:

“I have not been questioned yet on 1MDB. 1MDB is an entity that’s been set up by the BN government, and the principle of any organization or any corporate body set up, there are fiduciary duties of the management and the board.”

“If, I’m not saying I did, but for the sake of argument, if there is an illegal order that I give, they are not bound to follow. For example, as prime minister, I ask the police to kill someone, that’s an illegal order. They are not bound to follow.”

“Under the companies act, there are fiduciary duties of the board members. If I were to give something illegal and not in consonant with the law, then they must not obey. They must object to it.

“And as far as I’m concerned, I did not do anything that I thought was illegal.”

On whether the onus lay with the 1MDB board to take appropriate decisions and whether he had oversight:

“Oversight. The board has fiduciary duties, and the management had fiduciary duties. They had to decide what’s the best interest of the entity. That is the law. You’re the board member, you know you have certain responsibilities under the law.”

“You cannot say that I was instructed...even if I gave an instruction and it was deemed illegal by the law, they must not follow it.”

On whether the 1MDB board committed dereliction of duty:

“I cannot, it is subject to investigation. I want to stop and say that the board and management have fiduciary duties in accordance with the company act, they had to do things to the best interest of the company.”

On Malaysian financier Jho Low:

“We have no control over what he does. I cannot pass judgment. But there are certain things which he may or may not have done. But I am alright to say that investigations should proceed and if anyone is found to be on the wrong side of the law, let the legal process take its course.

“No, he was not working on my behalf. All those items he never invoked my name, but he did say he was acting for someone else.”

When asked who Low was acting for, Najib said: “You have to ask him that.”

On whether he gave instructions to Jho Low to negotiate deals on behalf of 1MDB:

“I didn’t give him instructions, but he volunteered to do certain things, which he thought would help 1MDB. But whatever he did ultimately is the responsibility of the management and board. They have to decide, you can engage anyone you like, but ultimately you have to decide whether it is the best interest of the company or not.”

On jewelry, including a pink diamond set for his wife:

“I do not know exactly the source of funding for these things. All I know is when I asked my wife, she said that there was one instance it was supposed to be a gift for her. But she never received it.”

On why he did not say much about 1MDB allegations earlier:

“All these things happened outside Malaysia. There is some international ramifications if I were to say, because I would name certain prominent individuals who might affect our diplomatic relations with them. It was on that basis I refrained from saying it.”

On whether his stepson used 1MDB funds to produce movies:

“...I would also like to place on record that Riza has done very well... the movies, the box office sales has reached beyond $800 million. So it is not abusing concern. It is a profitable concern. But source of funding is subject to investigation. I think we will leave at that.”

On $681 million moved to Najib’s personal account in 2013:

“With election coming, I did not want to get funding from companies because they would expect something in return eventually. If I have a source of funding I could fund the elections and I could also do a lot CSR (corporate social responsibility) work without being obligated to anyone. That was my real intention you see. And I assumed everything was fine.”

On elections:

“I saw part of it coming. I didn’t expect it to be this catastrophic. I though we could possibly lose some seats but I didn’t expect this sort of dramatic result, this calamitous result.

“It was a traumatic experience for us as you can imagine. For a party that has been established for more than 60 years in power. The history of Malaysia is basically the history of UMNO and Barisan Nasional.

“They (opposition) came up with very scurrilous allegations to defame me and the government. Unfortunately after a period of time, it changed public opinion.”

On Mahathir:

He knew BN, he knew the civil service. He knew everything about the system so he operated from within and from without, so that had a distinct advantage.

He was quite clever in a way, that he summarized everything in very simple terms and repeated ad nauseum the same same thing over and over again. The other point that I felt in a way bad about it, is that we didn’t lose to a superior agenda.

On 114 mln ringgit in cash seized from him:

“I’m maintaining that they are genuine donations, because the raid happened just two days after the GE (general election). As president of the party, I had to prepare for the elections, and elections are very expensive affairs.

“Because donations are made in cash in election times. You don’t send checks during election times, because people want cash. That is when monies are disbursed accordingly.”

On murder of Mongolian model Altantuya:

“The Altantuya case has already been dealt with. There is no evidence whatsoever that I ever met her, there are no records, no pictures or witness to say that I even knew her. It was subject to a proper trial and my name didn’t come up during the trial whatsoever. I’m on record to have sworn in a mosque in the name of Allah that I had nothing to do with the case.”

Reporting by Praveen Menon and Joseph Sipalan; Edited by Martin Howell