00:00Datuk Srinajib Razak and his son, Datuk Mohammed Nazifuddin, have succeeded in their bid to
00:06stay bankruptcy proceedings against them over unpaid tax arrears totalling more than RM1.7
00:13billion.
00:14A three-member Court of Appeal panel, chaired by Justice Datuk Dr Alwi Abdul Wahab, unanimously
00:21allowed the application in Putrajaya on Friday.
00:24The other judges on the panel were Justices Datuk Dr Shanaz Sulaiman and Ong Che Kwan.
00:32Justice Alwi, who read out the Court's decision, said the High Court Judicial Commissioner
00:37had erred in finding that the father and son would suffer no irreparable harm if the bankruptcy
00:43proceedings continued.
00:44He said the pay-first-dispute-later mechanism under the Income Tax Act 1967 should not be
00:52treated as an absolute bar, preventing the court from granting relief in special circumstances.
00:58Justice Alwi said this was such a case and that the stay would not prejudice the government.
01:03There are serious issues, novel issues which need to be determined first at the Special
01:09Commissioner of Income Tax.
01:11And again I must emphasize, since the tax assessment had been issued in 2018, there has never been
01:17a court which has been able to decide on the merits of the case.
01:22They've only been able to decide on the technical rules surrounding an assessment.
01:27And that is because the income tax is what it is.
01:30And if there's to be a change that needs to come from Parliament.
01:33But what the court has decided today is that they nonetheless hold the discretion to stay proceedings
01:41in the interests of justice.
01:43And in this case, because of the novel issues, and because these issues have yet to be determined,
01:49and the effect of bankruptcy could be very, very detrimental to both Srinajib and Nathana Nasifuddin,
01:56they have agreed that a stay is in the interest of both parties.
02:02The court also awarded RM30,000 in costs to Najib and Mohamed Nasifuddin each.
02:09Najib and Nasifuddin were appealing the November 17, 2025, High Court decision that dismissed their
02:16application to stay bankruptcy proceedings against them by the Inland Revenue Board .
02:23The proceedings stemmed from their failure to settle tax arreas of RM1.69 billion and RM37.6
02:31million respectively.
02:33In 2020, two separate High Courts allowed LHDN's applications for summary judgment to recover
02:40RM1.69 billion in tax arreas from Najib and RM37.6 million from Nathifuddin for the period
02:49from 2011 to 2017.
02:51The federal court ruled in 2023 that the father and son must pay the arrears after dismissing
02:58their appeals against the High Court decisions.
03:01Both are now challenging the tax assessments before the Special Commissioners of Income Tax,
03:06with their respective proceedings scheduled for September and October.
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