Breaking News: Court Orders House Arrest

On December 22, 2025, Malaysia’s High Court delivered a landmark decision ordering former Prime Minister Najib Razak to be released from Kajang Prison to serve the remainder of his sentence under house arrest. The ruling marks a dramatic turn in one of the world’s largest financial scandals and could reshape Malaysia’s political landscape.

The 72-year-old former leader, who has been imprisoned since August 2022, will now serve his six-year sentence at his Kuala Lumpur residence. This decision comes just days before another major verdict on December 26, when the court will rule on whether Najib is guilty of four additional charges of abuse of power and 21 counts of money laundering involving 2.2 billion ringgit in illegal transfers from the 1MDB fund.

The 1MDB Scandal: A $4.5 Billion Heist

The 1Malaysia Development Berhad scandal stands as one of the most audacious financial crimes in modern history. What began as a sovereign wealth fund intended to promote Malaysia’s economic development transformed into a sprawling international conspiracy involving theft, money laundering, and corruption across multiple continents.

Origins of the Fund

When Najib Razak became Malaysia’s sixth prime minister in 2009, he established 1MDB with the stated goal of attracting foreign investment and driving domestic development. As both prime minister and finance minister, Najib chaired the fund’s advisory board, giving him significant control over its operations. The fund was structured to operate with minimal oversight, a design flaw that would prove catastrophic.

Malaysian financier Jho Low, a flamboyant businessman who had cultivated connections with wealthy elites worldwide, became the architect of the scheme. Though Low never held an official position with 1MDB, he admitted to “consulting” for the fund and orchestrated transactions that would eventually siphon billions of dollars into shell companies and offshore accounts.

The Mechanics of the Theft

The theft unfolded through three primary schemes. The first involved a 2009 joint venture with PetroSaudi International, where 1MDB pledged $1 billion. Investigators later determined that much of this money was diverted into accounts controlled by Low rather than legitimate investments.

Between 2012 and 2013, Goldman Sachs helped 1MDB raise approximately $6.5 billion through bond sales, ostensibly for power assets and economic initiatives. However, prosecutors allege that over $4.5 billion from these transactions was stolen by high-level officials and their associates. The money was concealed through an intricate network of shell companies spanning multiple jurisdictions, making detection and recovery extraordinarily difficult.

The stolen funds bankrolled an astonishing array of luxury purchases. Low spent $85 million on parties between October 2009 and June 2010 alone, paying celebrities including Paris Hilton, Leonardo DiCaprio, and Megan Fox to attend his extravagant gatherings. He acquired luxury real estate in Manhattan, Beverly Hills, and London, purchased a private jet and the superyacht Equanimity, and spent approximately $310 million on art, including a record $48.8 million for a Basquiat painting.

Perhaps most shocking were the allegations regarding Najib’s wife, Rosmah Mansor. According to Jho Low’s own claims, over half a billion dollars worth of jewelry was purchased for her, including a $27 million pink diamond necklace that prosecutors say was funded directly from 1MDB.

The Investigation Unravels

The scandal began unraveling in 2015 when The Wall Street Journal and the Sarawak Report published explosive exposés revealing that nearly $700 million suspected to have originated from 1MDB had been deposited into Najib’s personal bank accounts. The revelations triggered widespread protests and international investigations.

Najib’s initial response was to consolidate power and shut down domestic investigations. He dismissed the attorney general leading the probe, reshuffled his cabinet to remove critics, and effectively paralyzed the parliamentary inquiry. His newly appointed attorney general cleared him of wrongdoing, claiming the $681 million was a donation from Saudi royalty and that $620 million had been returned.

However, international investigators were undeterred. The U.S. Department of Justice launched civil forfeiture proceedings in 2016, seeking to seize assets purchased with stolen 1MDB funds. The DOJ described the scandal as the largest kleptocracy case in its history, with Attorney General at the time calling it “kleptocracy at its worst.”

The Fall from Power

Public anger over 1MDB fueled the Bersih movement, which had long campaigned for electoral reform and clean governance. In August 2015, tens of thousands of protesters rallied in Kuala Lumpur and other cities, demanding Najib’s resignation after the Wall Street Journal revelations.

The scandal’s political impact reached its zenith in May 2018 when Najib and his long-ruling Barisan Nasional coalition suffered a stunning defeat in general elections. The opposition coalition led by former Prime Minister Mahathir Mohamad, who had once been Najib’s mentor, ousted him from power, ending Barisan Nasional’s six-decade grip on Malaysian politics. The news website Free Malaysia Today attributed the results to widespread distrust between Najib and the Malaysian people.

Criminal Prosecution and Conviction

Following his electoral defeat, investigations moved swiftly. On July 3, 2018, Najib was arrested by the Malaysian Anti-Corruption Commission and charged with criminal breach of trust and abuse of power related to $42 million transferred from SRC International, a former 1MDB subsidiary.

The charges quickly multiplied. By September 2018, Najib faced four counts of using his position to obtain bribes totaling 2.3 billion ringgit and 21 counts of money laundering involving the same amount. Additional charges followed, including accusations that he tampered with the 1MDB audit report.

The trial that began in August 2019 proceeded through multiple delays caused by the COVID-19 pandemic and various procedural issues. On July 28, 2020, Najib was found guilty on all seven charges related to SRC International and sentenced to 12 years in prison and a fine of 210 million ringgit. He became the first Malaysian prime minister to be convicted and jailed for corruption.

Najib appealed the conviction, submitting 307 grounds of appeal. However, both the Court of Appeal in December 2021 and the Federal Court in August 2022 upheld his conviction and sentence. On August 23, 2022, Najib began serving his sentence at Kajang Prison.

The Controversial Pardon and House Arrest

In February 2024, Malaysia’s pardons board, chaired by then-King Al-Sultan Abdullah Ahmad Shah, made the controversial decision to halve Najib’s prison sentence to six years and reduce his fine from 210 million ringgit to 50 million ringgit. The decision sparked immediate debate about justice and political influence.

Najib then claimed that an additional “addendum order” from the king entitled him to serve his remaining sentence under house arrest rather than in prison. This claim proved contentious, with multiple government authorities initially denying knowledge of such a document. However, the former king’s office eventually confirmed that such an order had been issued.

The legal battle over the house arrest document wound through multiple courts. In July 2024, the High Court initially dismissed Najib’s bid to enforce the house arrest order. However, the Court of Appeal overturned this decision in January 2025, ruling 2-1 to grant Najib access to the decree to argue his case. Today’s High Court decision brings this legal saga to a conclusion, at least temporarily.

The Mastermind Still at Large

While Najib serves his sentence, the alleged mastermind behind the 1MDB scheme remains free. Jho Low has been a fugitive since 2016, wanted by Interpol and facing charges in Malaysia, the United States, and other jurisdictions.

Low’s whereabouts have been the subject of intense speculation. He was initially believed to be in Taiwan, then Macau and Hong Kong. In July 2025, investigative journalists Bradley Hope and Tom Wright, who broke many of the original 1MDB stories, claimed in a livestream that Low is living in an exclusive Shanghai neighborhood under the alias Constantinos Achilles Veis, using a fake Australian passport. They alleged he is now working as a behind-the-scenes strategist for the Chinese government, helping sanctioned Chinese companies navigate international difficulties.

China has consistently denied harboring Low, but Malaysian authorities believe he is being protected by Chinese officials who have their own reasons for keeping him out of reach. Experts suggest that Low knows too much about deals between China and Malaysia during Najib’s tenure, making him a liability if extradited.

Low has maintained his innocence throughout, claiming in recorded conversations that he merely borrowed money from 1MDB for investments and that he was misled about the legality of his actions. In those same recordings from 2018, he attempted to negotiate the return of assets in exchange for his freedom and blamed Najib for the scandal, claiming the former prime minister had ultimate authority over fund decisions.

Global Ramifications

The 1MDB scandal’s reach extended far beyond Malaysia. Goldman Sachs, which helped raise billions for the fund, faced criminal charges for bribing corrupt officials to win 1MDB business. The investment bank ultimately agreed to pay $2.9 billion in penalties to regulators worldwide and reached a $3.9 billion settlement with Malaysia.

Assets purchased with stolen 1MDB funds were seized across multiple countries. The superyacht Equanimity was seized in Indonesia in 2018 and returned to Malaysia. Model Miranda Kerr, who had dated Low, surrendered $8 million in jewelry he had given her. Artworks, real estate, and other luxury items were forfeited in civil proceedings in the United States and other jurisdictions.

The scandal also touched Hollywood. The 2013 film “The Wolf of Wall Street,” starring Leonardo DiCaprio, was allegedly financed partly with stolen 1MDB money. DiCaprio, who had attended Low’s parties and thanked him during his 2014 Golden Globes acceptance speech, later cooperated with authorities and returned gifts Low had given him.

What Comes Next?

Najib’s immediate future hinges on the December 26 verdict in his ongoing trial. If convicted on the four charges of abuse of power and 21 counts of money laundering related to the 2.3 billion ringgit in illegal transfers, he could face a substantially extended sentence. Each abuse of power charge carries a potential penalty of up to 20 years in prison.

The political implications are equally significant. Najib’s United Malays National Organisation (UMNO) remains a key player in Malaysian politics, and current Prime Minister Anwar Ibrahim’s coalition depends on UMNO support to maintain its parliamentary majority. This delicate political balance raises questions about whether concerns over corruption enforcement might be tempered by political necessity.

UMNO President Ahmad Zahid Hamidi, himself facing corruption charges, has continued advocating for Najib, expressing hope for a full royal pardon. He argues that Najib has served three years in prison and deserves consideration, though he acknowledges that the decision rests with the Yang di-Pertuan Agong, who chairs the Federal Territories Pardons Board.

Najib’s Apology and Continued Denials

In October 2024, Najib issued a public apology through his son for the 1MDB scandal, acknowledging that it occurred during his tenure as prime minister and finance minister. However, he maintained that he was misled about the source of funds by Jho Low and other 1MDB officials, insisting he had no knowledge of illegal transfers.

This partial admission represents a shift from his earlier blanket denials but stops short of accepting personal responsibility for the theft. Critics argue that as the chairman of 1MDB’s advisory board and the sole signatory for major transactions, Najib’s claims of ignorance strain credibility.

A Scandal That Changed Malaysia

The 1MDB scandal fundamentally altered Malaysia’s political landscape. It ended the Barisan Nasional coalition’s unbroken rule since independence, demonstrated that even the most powerful leaders could face justice, and exposed the vulnerabilities in Malaysia’s governance systems that allowed such massive theft to occur.

Yet questions remain about whether genuine reform has taken root. The decision to grant Najib house arrest, the reduction of his sentence, and the continued political influence of figures involved in the scandal suggest that Malaysia’s journey toward accountability remains incomplete.

As Najib prepares to leave Kajang Prison for house arrest and awaits another crucial verdict, the 1MDB saga serves as a stark reminder of how corruption at the highest levels can devastate a nation’s economy, international reputation, and public trust. With the alleged mastermind still at large and billions in stolen funds yet to be recovered, this extraordinary chapter in Malaysian history is far from closed.

The coming days will reveal whether Malaysia’s courts can deliver justice in the face of political pressure, whether house arrest represents a reasonable accommodation or a troubling compromise, and whether the country can finally turn the page on its greatest financial scandal. For now, the world watches as one of the most dramatic corruption cases of the modern era continues to unfold.