Najib seeks to challenge appointment of private lawyer in RM1.67b tax suit
Najib Abdul Razak is challenging the legality of the appointment of a veteran private lawyer to represent the government in its RM1.67 billion tax suit against the former prime minister and finance minister.
As a result, the scheduled hearing of Najib’s application to stay the tax suit against him pending his tax-reassessment appeal with the Inland Revenue Board did not proceed this afternoon.
Najib Abdul Razak is challenging the legality of the appointment of a veteran private lawyer to represent the government in its RM1.67 billion tax suit against the former prime minister and finance minister.
As a result, the scheduled hearing of Najib’s application to stay the tax suit against him pending his tax-reassessment appeal with the Inland Revenue Board (IRB) did not proceed this afternoon.
Najib’s lead counsel Muhammad Shafee Abdullah announced his client’s intent to file the legal challenge against the validity of DP Naban’s appointment during open proceedings before Kuala Lumpur High Court judge Ahmad Bache.
The announcement came after a protracted back and forth between Shafee and Naban over whether the latter needs to produce his official letter of appointment to be shown to the former.
Shafee had sought for Naban to produce in court the letter of appointment as this was the right of the defendant to demand it, as highlighted by a Federal Court ruling in August.
On Aug 7, the seven-person apex court bench led by Chief Justice Tengku Maimun Tuan Mat denied Najib’s appeal to disqualify former Federal Court judge and practising lawyer Gopal Sri Ram’s appointment as ad hoc deputy public prosecutor in the former premier's criminal cases, which include the ongoing RM2.28 billion 1MDB trial.
However, the Federal Court on that day had allowed a portion of Najib’s appeal, which was to compel the prosecution to show the defence the copy of Sri Ram’s appointment as ad hoc DPP.
Naban, this afternoon, however, countered that his appointment to act for the government in the tax suit against Najib has been properly done under Section 24 (3) of the Government Proceedings Act 1956.
As the argument escalated between both Shafee and Naban, the atmosphere heated up to an extent that Ahmad Bache was forced to intervene to douse the fiery exchange.
“Order, order. Let him (Naban complete what he has to say),” the judge warned the court.
Both parties were summoned to Ahmad Bache’s chambers and then proceedings resumed soon after. Shafee then made the announcement to court on Najib's intent to challenge Naban’s appointment as counsel for the plaintiff's government.
“We are challenging the appointment itself, the legality of the appointment," Shafee said.
“Secondly, disqualification would also be raised because we (Najib’s legal team) have just been informed that my learned friend (Naban) has been acting in conflict of interest in other cases where it involved the same people (party) as my client (Najib’s tax suit),” he added.
Naban, who was seen seated with other federal counsel representing the government, then stood up and acknowledged that it is his (Shafee’s) right to mount such a challenge for his client (Najib).
“Now that he (Shafee) is alleging I am in conflict (of interest), I must be able to answer (given the proper right to reply to any such legal challenge). A direct application (to challenge his appointment) must be made,” Naban said.
Ahmad Bache then fixed Nov 29 for case management, to update the court on Najib’s filing of the legal challenge against Naban’s appointment.
When met by journalists after proceedings, Shafee claimed that they were never told until today that a private practitioner would be acting for the government in the tax suit against Najib.
“We will make a (formal) application to challenge the validity (of Naban’s appointment).
“There is a conflict of interest in which the IRB income tax (suit against Najib) and he (Naban) also has his (legal) firm doing income tax (cases for private clients) against IRB,” Shafee explained.
Naban is a senior partner in law firm Lee Hishammuddin Allen and Gladhill, in which the firm’s website at https://www.lh-ag.com/ described him as “a highly experienced practitioner leading the firm’s tax, SST and customs practice”.
Asked whether he would file the application in Ahmad Bache’s High Court or as a separate judicial review application at a separate Kuala Lumpur High Court, Shafee said they would weigh both options before deciding which route to proceed with.
On Aug 8, Najib had filed the application to stay the tax suit proceedings pending his tax-reassessment appeal with IRB.
The former premier had claimed that he had a high chance of winning the appeal to have his taxes reassessed because donations allegedly formed a large portion of the funds from which the RM1.69 billion tax sum was calculated.
Incidentally, on Aug 8, the government, through IRB, had also filed their application for summary judgment against Najib in the tax suit.
Under Malaysia's civil law, summary judgment is a mode to dispose of legal action without going for a full trial, in clear cases where the defendant has no defence against the claim.
In the summary judgment application, the IRB contended that Najib must still pay RM1.69 billion in tax despite his ongoing reassessment appeal with the board.
The government filed the suit against Najib on June 25.
It sought over RM1.69 billion from the former premier, with an annual five percent interest rate beginning from the date of judgment, as well as costs and other relief deemed fit by the court.
In its statement of claim, the government said Najib had failed to pay his income taxes from 2011 to 2017 within the stipulated 30-day period after assessment notices were issued.
As such, the amount owed each year was increased by 10 percent.
It also said that Najib was given 60 days to pay the taxes, together with the 10 percent increase, but still failed to do so.
Following this, Najib was slapped with another five percent increase in the 10 percent hike, bringing the total amount of income tax due to RM1,692,872,924.83.
The final amount owed each year is as follows:
2011: RM134,180,247.10
2012: RM370,674,071.81
2013: RM1,029,767,352.60
2014: RM137,612,077.11
2015: RM19,495,822.53
2016: RM743,179.21
2017: RM400,174.47
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