Najib, son’s bankruptcy proceedings over RM1.7bil tax arrears suspended

 Court of Appeal says High Court did not properly exercise its discretion in refusing the father and son's bid to suspend bankruptcy proceedings.

In July 2020, a summary judgment was entered against Najib Razak for tax arrears of over RM1.69 billion, while a RM37.6 million sum was ordered against his son, Nazifuddin.

PUTRAJAYA:

The Court of Appeal has allowed an application by Najib Razak and his son, Nazifuddin, to suspend the bankruptcy proceedings against them for failing to settle RM1.7 billion in tax arrears.

Justice Alwi Abdul Wahab said there were special circumstances justifying the stay of proceedings while they challenged the tax quantum before the special commissioners of income tax (SCIT).

He found that the High Court had not properly exercised its discretion in refusing the father and son’s bid to suspend the bankruptcy proceedings.

“The appeal at SCIT discloses serious, substantial, and in part, arguable issues.

“The High Court brushed aside these issues and failed to address or weigh them in deciding whether sufficient grounds existed for a stay,” Alwi said.

The court also took note of Najib’s criminal and civil cases and said the issuance of a bankruptcy order would automatically stay those proceedings, thereby disrupting the administration of justice and delaying litigation of public importance.

Other judges who sat with Alwi were Justices Shahnaz Sulaiman and Ong Chee Kwan.

Alwi also said the bankruptcy proceedings against Najib and Nazifuddin would not cause prejudice to the government.

“The Inland Revenue Board (LHDN) retains its statutory entitlement to enforce any finalised tax liability once the filing disputes are conclusively determined by the SCIT,” he said.

In July 2020, a summary judgment was entered against Najib for tax arrears of over RM1.69 billion, while a RM37.6 million sum was ordered against Nazifuddin.

A summary judgment is obtained when the court decides on a case, through written submissions, without a full trial and calling witnesses.

Bankruptcy notices were also filed against Najib and Nazifuddin.

Lawyer Farhan Shafee represented the father and son while senior revenue counsel Al-Hummidallah Idrus appeared for LHDN. - FMT