1MDB sues former Malaysian PM Najib’s wife for $346M worth of luxury goods

In the civil lawsuit filed last Thursday, the plaintiffs accused Rosmah of using the companies’ funds to buy lavish goods, including jewelry, watches, and handbags, according to Bloomberg.

Rosmah Mansor, wife of former Malaysian Prime Minister Najib Razak, arrives at the Kuala Lumpur Court Complex to attend a verdict hearing in a corruption case against her, in Kuala Lumpur, Malaysia September 1, 2022. Photo by Reuters/Hasnoor Hussain

They asserted that Shabnam Naraindas Daswani, the second defendant named in the lawsuit, had purchased or procured the items on behalf of Rosmah.

Funds from 1MDB and its subsidiaries were allegedly funneled through various offshore entities and paid via 320 transactions to 48 vendors across 14 jurisdictions for the luxury items, according to the filing, Malaysian newspaper The Star reported.

These payments amount to $346 million, the plaintiffs said.

They further argued that the goods represented a "traceable substitute" for 1MDB and its subsidiaries' trust property, thereby granting them an equitable proprietary interest in these items, according to The Straits Times.

Thus, they sought a court declaration affirming their equitable proprietary interest in the goods and their traceable proceeds held by Rosmah, along with an order for her to pay $346 million to the first six plaintiffs, namely 1MDB, SRC International, 1MDB Energy Holdings, 1MDB Energy, 1MDB Energy (Langat) and Global Diversified Investment Company.

The lawsuit is scheduled for case management on May 24.

Najib and his wife were implicated in the multibillion-dollar 1MDB graft scandal, according to Reuters.

Established in 2009 during Najib's first year as prime minister, 1MDB was intended to function as a sovereign wealth fund to boost economic development through strategic investments.

However, the U.S. Department of Justice alleged that between 2009 and 2014, $4.5 billion was siphoned off from 1MDB, with roughly $1 billion funneled into Najib's personal bank accounts.

A portion of the stolen funds were used to buy jewelry for Rosmah, including a $27 million pink diamond necklace, U.S. lawsuits said.

In 2018, police discovered 12,000 pieces of jewelry, 567 luxury handbags from brands like Hermes and Chanel, 423 watches, and $26 million in cash at properties linked to the couple.

Rosmah was sentenced to a decade in prison and fined 970 million ringgit ($205.2 million) in September 2022 for seeking and receiving bribes in exchange for government contracts.

Around that time, her husband Najib was also jailed for corruption.