Malaysia pledges to help Swiss probe as pres­sure on PM grows

The Pak Banker - - MARKETS/SPORTS -

Malaysia's at­tor­ney gen­eral promised Satur­day to co­op­er­ate with a Swiss call for help in prob­ing al­leged mas­sive cor­rup­tion that has placed Prime Min­is­ter Na­jib Razak un­der se­vere pres­sure. Swiss pros­e­cu­tors had is­sued a state­ment say­ing they be­lieve around $4 bil­lion was stolen from Malaysian state-owned com­pa­nies, in­clud­ing a firm with close links to Na­jib, and called for Malaysian as­sis­tance in their in­ves­ti­ga­tion. The ap­peal came just days af­ter Na­jib's at­tor­ney gen­eral, Mo­hamed Apandi Ali, sparked out­rage and al­le­ga­tions of a cover-up by declar­ing Na­jib com­mit­ted no wrong­do­ing in ac­cept­ing a mys­te­ri­ous $681 mil­lion pay­ment to his per­sonal bank ac­counts in 2013.

"My of­fice in­tends to take all pos­si­ble steps to fol­low up and col­lab­o­rate with our Swiss coun­ter­parts," Apandi said in a state­ment quoted by Malaysian me­dia. Malaysia has been rocked for more than a year by al­le­ga­tions that per­haps bil­lions of dol­lars had gone miss­ing from com­plex over­seas trans­ac­tions in­volv­ing the Na­jib-linked com­pany, 1Malaysia De­vel­op­ment Ber­had (1MDB).

The scan­dal hit an­other gear last July when the $681 mil­lion pay­ment to Na­jib, now 62, was re­vealed. The rev­e­la­tion fu­elled sus­pi­cions that the money came from 1MDB, an in­vest­ment com­pany that has launched a fire sale of as­sets to pay off bil­lions of dol­lars in debt.

Na­jib and 1MDB have de­nied wrong­do­ing, but both face ac­cu­sa­tions from the op­po­si­tion and other crit­ics of hid­ing facts.

Since last year, Na­jib's govern­ment has re­sponded to the snow­balling scan­dal by de­tain­ing whis­tle-blow­ers, shut­ting down me­dia out­lets and web­sites that re­ported on the af­fair, and warn­ing that those who ex­pose any­thing fur­ther could face pros­e­cu­tion.

He also purged crit­ics in his top rul­ing cir­cle and fired his at­tor­ney gen­eral, who had been in­ves­ti­gat­ing the money paid to Na­jib, re­plac­ing him with Apandi. Apandi said last week the money was a harm­less "per­sonal do­na­tion" from the Saudi royal fam­ily, prompt­ing de­ri­sion in Malaysia. In Septem­ber, Swiss au­thor­i­ties an­nounced they had frozen "tens of mil­lions of dol­lars" in sus­pi­cious as­sets in Swiss ac­counts held by cur­rent and for­mer of­fi­cials from Malaysia and the United Arab Emi­rates.

"To date, how­ever, the Malaysian com­pa­nies con­cerned have made no com­ment on the losses they are be­lieved to have in­curred," the pros­e­cu­tors' state­ment said Fri­day.

The re­quest was made as part of crim­i­nal pro­ceed­ings opened last Au­gust against two for­mer 1MDB of­fi­cials and "per­sons un­known" sus­pected of brib­ing for­eign of­fi­cials, mis­con­duct in a pub­lic of­fice, money laun­der­ing and crim­i­nal mis­man­age­ment, the Swiss said. Op­po­si­tion Malaysian law­maker Tony Pua de­manded that Apandi fully co­op­er­ate with the Swiss to "re­move the per­cep­tion that (he) was bi­ased" to­ward Na­jib, and that Malaysian au­thor­i­ties re­dou­ble ef­forts to probe "Malaysia's big­gest scan­dal in his­tory."

Crit­ics, how­ever, al­lege that key in­sti­tu­tions like the Malaysian po­lice, anti-cor­rup­tion agency and ju­di­cial or­gans are sus­cep­ti­ble to pres­sure from the cor­rup­tion-prone rul­ing coali­tion in power since 1957 and now headed by Na­jib.

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