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

In July 2020, a summary judgment was entered against Najib Razak for tax arrears of more than RM1.69 billion, while his son Nazifuddin was ordered to pay RM37.6 million. The Court of Appeal has allowed Najib and Nazifuddin to suspend the bankruptcy proceedings against them for not settling the RM1.7 billion tax arrears. Justice Alwi Abdul Wahab stated that there were special circumstances justifying the stay of proceedings while they challenge the tax amount before the special commissioners of income tax.

The High Court had not properly exercised its discretion in denying the bid to suspend the bankruptcy proceedings. The appeal at SCIT reveals serious, substantial, and arguable issues that the High Court failed to address or weigh in deciding whether sufficient grounds existed for a stay. The court also noted Najib's criminal and civil cases, stating that issuing a bankruptcy order would disrupt the administration of justice and delay important litigation.

The bankruptcy proceedings against Najib and Nazifuddin would not prejudice the government, as the Inland Revenue Board retains the right to enforce any finalised tax liability once the disputes are resolved by SCIT.