The High Court has scheduled January 6, 2025, to hear the appeals of former Malaysian Prime Minister Datuk Seri Najib Razak and his son, Datuk Nazifuddin Najib, in their bid to stay bankruptcy proceedings. The proceedings stem from their failure to pay outstanding tax liabilities amounting to RM1.69 billion and RM37.64 million, respectively, owed to the Inland Revenue Board (IRB). Their initial applications to halt the bankruptcy process were rejected by the court’s deputy registrar in July.
The new hearing date was set after a case management session on Monday, overseen by High Court (Insolvency) Senior Assistant Registrar Naeilah Nikrul Tarmizi. Najib and Nazifuddin’s lawyer, Wee Yeong Kang, confirmed the hearing schedule, stating, "Yes, the hearing has been fixed for January 6, 2025." The appeal will be heard by Judicial Commissioner S. Suhendran via a Zoom session.
In late July, High Court (Insolvency) Deputy Registrar Kamarul Aris Kamalluddin had denied both Najib and Nazifuddin’s applications to stay the bankruptcy proceedings. The pair had argued that their tax cases were still pending a decision from the Special Commissioners of Income Tax (SCIT), and that the bankruptcy process should be postponed until a ruling is made on the merits of the additional tax assessments.
The bankruptcy proceedings were initiated after the Federal Court dismissed the duo’s appeal against the summary judgments issued in 2020, which compelled Najib and his son to settle their tax arrears. In October 2022, a five-member Federal Court panel upheld the judgments, ordering the pair to pay RM1.69 billion and RM37.64 million in taxes.
In delivering the Federal Court’s unanimous ruling, Judge Tan Sri Nallini Pathmanathan emphasized the application of the "pay first, dispute later" principle. She cited international precedents from South Africa, Australia, Hong Kong, and Ghana, pointing out that this method is widely adopted in tax collection matters globally. The ruling effectively obliges taxpayers to fulfill their tax liabilities before disputing the amounts through legal channels.
Najib and Nazifuddin’s tax liabilities cover the period from 2011 to 2017. The summary judgments, issued by the High Court in July 2020, were awarded to the IRB on the grounds that the defendants had no triable issues in their defense. The court ruled that allowing the case to proceed to a full trial would only delay the inevitable outcome.
In October 2021, the Court of Appeal upheld the High Court's ruling, leaving the bankruptcy proceedings as the last major legal recourse for Najib and his son to avoid financial ruin. They are hoping that the SCIT will eventually rule in their favor on the tax assessments, but until that decision is made, the IRB is moving ahead with the bankruptcy process.
If their appeal for a stay is unsuccessful, both Najib and Nazifuddin could face bankruptcy, which would have serious personal and financial implications for the former prime minister and his family. The January 2025 hearing will be a critical moment for their legal battle against the tax authorities.
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