This article first appeared in The Edge Malaysia Weekly on June 1, 2020 - June 7, 2020
A decade and a half before the high-profile money laundering cases involving former premier Datuk Seri Najib Razak and members of his family, a medical doctor and co-founder of Safire Pharmaceuticals Sdn Bhd was the first in the country to be charged under the Anti-Money Laundering Act 2001 (AMLA) for sums involving millions of dollars.
More specifically, Dr Hamimah Idruss was charged in 2005 with eight counts of money laundering of US$12 million (RM41.337 million) under AMLA and 10 counts of abetting in forgery in the issuance of promissory notes to secure funding from Siemens Financial Services Ltd (SFS) for her company.
AMLA later evolved into the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001.
In February, a three-member Court of Appeal bench led by Datuk Yaacob Md Sam upheld the 2012 decision of the Sessions Court, which found the 70-year-old Hamimah guilty, thus concluding 15 years of trial and exhausting all avenues of appeal. Her appeal in 2017 to the High Court was also dismissed.
The written judgment of the appellate court was only released recently. In its judgment, the appeals court sentenced Hamimah to 38 years’ imprisonment and ordered her to pay a pecuniary penalty of RM6.35 million or in default of one year’s jail.
But even though a 38-year jail sentence was meted out, she will only serve three years’ jail for the 10 forgery convictions under Section 109 of the Penal Code, as the sentences were ordered to run concurrently.
Hamimah’s case centred on purported promissory notes issued by the company she co-founded with her husband that had been forged with the guarantors’ signatures.
It was revealed in court that in 2003, she had directed her marketing manager Yusaini Wan Abi Safian to prepare 10 promissory notes that were purportedly issued by Safire and guaranteed by Pharmaniaga Bhd and the Ministry of Health (MoH).
The promissory notes — defined by Investopedia as a financial instrument that contains a written promise by one party to pay another party (the note’s payee) a definite sum of money, either on demand or at a specified future date — possessed the forged signatures of then Pharmaniaga chief operating officer Dr Effendy Tenang and then deputy health minister Datuk Seri Dr Sulaiman Mohamad.
Promissory notes to save Safire
In the unanimous Court of Appeal judgment written by Judge P Ravinthran dated March 2, the court found that the promissory notes were issued on Hamimah’s directive to Yusaini in a bid to save her heavily indebted company.
A total of 54 prosecution witnesses were called and Yusaini, the 47th and star witness, testified that he was ordered by his boss to draft the promissory notes and to forge Effendy’s signature, and was paid RM200,000 in return. Yusaini maintained that he would not have forged Effendy’s signature but for Hamimah’s insistence.
Effendy denied having signed the notes. The promissory notes, along with other supporting documents such as invoices and delivery orders purportedly issued by Great Econ Power Sdn Bhd, were attested before a commissioner for oaths.
SFS credit portfolio management head Florian Rek, the prosecution’s first witness, testified that his department was in charge of purchasing long-term receivables that included promissory notes.
“Rek said his company purchased the 10 promissory notes for the sum of US$1.2 million each, which was issued by Safire.
“The foreign witness said he sought legal advice from a London-based entity, Bon Pour Aval Ltd, which assured the promissory notes had ‘very good credit risk’ because they were guaranteed by Pharmaniaga and the Ministry of Health,” the judgment by Ravinthran states.
Sulaiman, the deputy minister at the relevant time, denied ever issuing a guarantee letter from MoH to a company. “Issuing a guarantee letter from the ministry on behalf of the Malaysian government to any company was a breach of ethics and against government policy,” he previously testified.
No appealable error
The appellate court that comprised judges Yaacob, Datuk Zabariah Mohd Yusof and Ravinthran found “no appealable error” in the decisions of the Sessions Court and High Court.
“The convictions recorded by the Sessions Court are affirmed. We also affirm the sentences imposed by the Sessions Court.
“However, we shall make a correction in respect of the pecuniary penalty that the accused is liable to pay. We shall substitute the sum of RM6.39 million to RM6.35 million, which will be payable pecuniary penalty,” Ravinthran said.
Of the RM41.337 million given out by SFS, the authorities managed to recover close to RM35 million, hence the pecuniary penalty of RM6.35 million that was imposed for money laundering — defined by Bank Negara Malaysia as “a process of converting cash or property derived from criminal activities to give it a legitimate appearance. It is a process to clean ‘dirty’ money in order to disguise its criminal origin”.
Hamimah was represented by counsels Harvinderjit Singh and Sara Ann Chay Sue May while deputy public prosecutors Datuk Mohd Dusuki Mokhtar and Asmah Musa appeared for the prosecution.
Her trial of 10 counts of abetting to forge and eight charges of money laundering began in 2005, and took longer as midway through her trial, her then counsel Pushpam Subramaniam died.
Current money laundering cases before the court involving Najib and his family involve billions of ringgit. Najib faces 24 such charges in relation to funds of SRC International Sdn Bhd and 1Malaysia Development Bhd totalling RM2.322 billion, and is currently on trial.
His wife Datin Seri Rosmah Mansor is facing 17 counts of money laundering in excess of RM7 million but has yet to stand trial.
Her son and Najib’s stepson, Riza Shahriz Abdul Aziz, was recently given a discharge not amounting to an acquittal by the Sessions Court on five counts of money laundering charges involving US$248 million (RM1.3 billion) of 1MDB funds.
The discharge came after an agreement was reached between Riza and the Attorney-General’s Chambers, but has been criticised as being unjust as, among others, Riza was only compelled to return less than half of the amount he was charged with laundering.
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