The 1MDB legal battle concludes with significant costs awarded to Riza Aziz after a lengthy trial highlights unnecessary litigation and substantial public fund expenditure.
KUALA LUMPUR: The High Court today issued a landmark ruling, ordering the embattled 1Malaysia Development Bhd (1MDB) to pay RM225,000 in legal costs to Datuk Seri Najib Razak’s stepson, Riza Aziz, along with his two companies, Red Granite Pictures Inc and Red Granite Capital Ltd. This ruling marks the conclusion of a protracted legal battle that saw significant public funds spent in pursuit of a case that has now been withdrawn by the state investment arm.
Judge’s Ruling on Legal Costs
The High Court’s decision was made by Judge Datuk Raja Ahmad Mohzanuddin Shah Raja Mohzan, who considered various factors in arriving at the substantial cost award. The case had spanned nearly four years, with 1MDB filing a series of complex claims against Riza Aziz and his companies, which included allegations of financial mismanagement tied to the hit 2013 film The Wolf of Wall Street.
Despite the lengthy litigation process, 1MDB made a dramatic turn in February 2025 by announcing its decision to discontinue the lawsuits against Riza and his businesses. On 24 February 2025, the state investment fund stated it would withdraw its claims for the misappropriation of funds, prompting the court to issue its ruling on costs.
Judge Raja Ahmad Mohzanuddin Shah expressed concern about the burden that the lengthy trial had placed on both the court system and public resources. He took into account the complexity of the case, which involved nine days of trial hearings, over 8,000 pages of court filings, numerous case management sessions, and a multitude of interlocutory applications. The judge’s ruling, which also stated that the plaintiffs were not permitted to file the case again, concluded that RM225,000 was a reasonable amount to compensate the defendants for the unnecessary litigation.
“These are no small matters,” Judge Raja Ahmad Mohzanuddin Shah remarked in his judgment. “The efforts involved in managing such a case, with its scale and scope, should not be underestimated. Therefore, costs have been fixed at RM225,000 without the liberty to file afresh.”
Background of the Case
The case at the center of this legal battle revolved around 1MDB’s claims that Riza Aziz, through his companies, had misappropriated a portion of the state-owned investment fund’s resources. The primary contention was that 1MDB had been defrauded out of US$248 million, some of which allegedly found its way into the production of The Wolf of Wall Street, a Hollywood blockbuster that was partially financed by Red Granite Pictures, a company co-founded by Riza Aziz.
1MDB’s initial aim was to seek declarations that Riza and his companies were liable for these funds and to demand repayment for the alleged misappropriation. However, despite years of legal proceedings, the case never reached a conclusion on the merits. Instead, it came to an abrupt halt when 1MDB announced its decision to withdraw the case in early 2025.
The Role of the Global Settlement and the 1MDB Withdrawal
The decision to withdraw the case was tied to the revelation of a “Global Settlement,” which had been under negotiation by the parties involved. This settlement, which came to light in February 2025, had been finalized after months of discussions and negotiations behind closed doors. According to a letter dated 13 February 025, from Dr. Mohammad Zamri Zainabideen, the Special Operations Director at the Malaysian Anti-Corruption Commission (MACC), the settlement was discovered during the trial proceedings.
Despite this late development, 1MDB’s legal team had not pursued an independent verification of the settlement details before deciding to withdraw the lawsuit. Judge Raja Ahmad Mohzanuddin Shah criticized the plaintiffs for their lack of diligence, emphasizing that the existence of the Global Settlement should have prompted them to investigate more thoroughly rather than rely solely on the defendants’ disclosures.
The plaintiffs’ failure to verify the settlement details earlier, the judge argued, was one of the primary reasons for the significant costs incurred during the case.
Excessive Public Fund Usage and Legal Expenses
The drawn-out nature of the trial, combined with the plaintiffs’ withdrawal at such a late stage, raised serious concerns about the misuse of public resources. Over the course of almost five years, 1MDB, which is fully owned by the Malaysian government, expended significant public funds to pursue a lawsuit that, in the end, was deemed unnecessary.
The defense, led by Riza Aziz and his legal representatives, was forced to mount a vigorous defense against the accusations. This entailed not only considerable legal fees but also time and effort that could have been directed elsewhere. The ruling has ignited debates about the prudent use of state resources in high-profile cases, particularly in the context of ongoing public sector financial scrutiny.
For Riza Aziz and his companies, the withdrawal of the lawsuit was a long-awaited victory, but it came at a significant financial and emotional cost. The legal battle has dragged on for years, and the considerable expenditure of time and money on both sides raises uncomfortable questions about the priorities of a government-backed legal campaign.
Legal and Financial Implications of the Case
With the conclusion of the trial, the focus now shifts to the broader implications of the case, particularly the role of the Global Settlement in resolving the disputes and the potential consequences for similar cases in the future. The case serves as a cautionary tale about the risks of prolonged litigation, especially when key settlements are not disclosed in a timely manner.
While Riza Aziz and his companies can now look forward to the legal closure of this matter, the damage to public trust and the perception of how state funds are managed may linger. The case highlights the need for more careful consideration before embarking on lengthy and costly litigation that may ultimately not serve the public interest.
As Malaysia moves forward from this high-profile legal saga, it remains to be seen whether future cases will follow a similar pattern of protracted litigation and costly withdrawals, or if more efficient resolutions can be found to avoid unnecessary public expenditure. – NMH
Datin Hasnah is the co-founder and CEO of New Malaysia Herald based in Kuala Lumpur, Malaysia.
With an extensive background in mass communication and journalism, she works on building up New Malaysia Herald and it’s partner sites. A tireless and passionate evangalist, she champions autism studies and support groups.
Datin Hasnah is also the Editor in Chief of New Malaysia Herald.
Facebook Comments
Facebook Comments