Sept 4 verdict for Najib, son in appeal to stay bankruptcy proceedings

 

The Court of Appeal has fixed Sept 4 to deliver its decision on the appeals brought by former prime minister Najib Abdul Razak and his son, Nazifuddin Najib, who are seeking to stay bankruptcy proceedings against them.

A three-member bench comprising Alwi Abdul Wahab, Shahnaz Sulaiman, and Ong Chee Kwan heard submissions today from counsel for the appellants, Shafee Abdullah, and senior revenue counsel Norhisham Ahmad, who appeared for the Inland Revenue Board (IRB).

Following the hearing, the bench reserved its judgment.

Najib and Nazifuddin are appealing against the High Court’s decision on Nov 17, 2025, which dismissed their application for a stay of the bankruptcy proceedings.

The stay was sought pending the resolution of their appeals before the Special Commissioners of Income Tax (Scit), which challenged the additional tax assessments issued by the IRB.

The bankruptcy proceedings arose from separate High Court decisions granting the IRB’s applications for summary judgment against the father and son in respect of unpaid tax arrears for the assessment years 2011 to 2017.

Inland Revenue Board

The IRB is seeking to recover RM1.69 billion from Najib and RM37.6 million from Nazifuddin in respect of the outstanding tax arrears.

Both Najib and Nazifuddin previously challenged the summary judgments entered against them, but their appeals to the Court of Appeal and subsequently to the Federal Court were dismissed.

Following those dismissals, bankruptcy notices were issued against each of them.

In response, they applied for a stay of the bankruptcy proceedings. However, on July 29, 2024, High Court deputy registrar Kamarul Aris Kamalluddin dismissed their stay applications.

They appealed that decision to the High Court, but were again unsuccessful, prompting the present appeals before the Court of Appeal.

Parties argue over stay application

At today’s hearing, Shafee submitted that special circumstances warranted the grant of a stay, as the appeals filed by Najib and Nazifuddin before the Scit, which challenge the underlying additional tax assessments, have yet to be finally determined.

He informed the bench that the Scit hearing for Najib’s case was scheduled for September, while Nazifuddin’s case was fixed for October.

He submitted that the outcome of the Scit appeals would directly determine the appellants’ underlying liability for the additional tax assessments, and that refusing a stay would effectively render those appeals nugatory.

He further argued that permitting the bankruptcy proceedings to continue could result in Najib being adjudged bankrupt due to his inability to satisfy the sums demanded, thereby causing irreparable harm to his financial standing.

In response, Norhisham submitted that under the Income Tax Act 1967, Najib is required to settle the tax debt as a precondition, notwithstanding the pending appeal.

He contended that no special circumstances existed to justify a stay, as the law mandates payment of the tax liability regardless of ongoing appellate proceedings before the Scit.

- Bernama