Najib stepson ‘used 1MDB funds to buy US properties’

KUALA LUMPUR: The stepson of Malaysian Prime Minister Najib Razak allegedly used funds diverted from a state investment company to buy properties in the US, The Wall Street Journal reported.

Riza Aziz spent about US$50 million (1.8 billion baht) on two properties in New York and Los Angeles, deals the US Federal Bureau of Investigation is investigating, the paper reported, citing documents and people it didn’t identify. The money was part of at least $238 million allegedly transferred via an intermediary to a company wholly-owned by Mr Riza, it said.

The funds that went to Mr Riza’s Red Granite Capital originated from 1Malaysia Development Bhd (1MDB), The Wall Street Journal said. The Malaysian investment firm remains at the centre of multiple global probes amid claims of money laundering and embezzlement. Its advisory board has been chaired by Mr Najib.

Mr Najib’s family has been entangled in various alleged links to 1MDB funds, alongside a separate donation scandal that has caused nearly a year of political tension. While Mr Najib has so far retained the support of powerful divisional chiefs in his ruling party, the protracted investigations are a distraction as economic growth slows and voters, including his key support base of ethnic Malays, face increased living costs.

The New York Times reported in February 2015 on the same property purchases that took place through a shell company Mr Riza controlled. The homes were bought from a company connected to Malaysian financier Jho Low, the paper said. Mr Low has had ties to 1MDB, describing his role to the media as informal consulting work that didn’t break any law.

An investigation by the US Justice Department is focused on properties purchased by the shell companies, The New York Times further reported in September.

Investigators believe that Red Granite Pictures, a Hollywood production company that backed The Wolf of Wall Street and is partly owned by Mr Riza, received funds from Red Granite Capital, The Wall Street Journal said yesterday. A spokesman for the film company told the paper “there has never been anything inappropriate about any of Red Granite Pictures or Riza Aziz’s business activities”.

Calls to the office of Red Granite Pictures in Los Angeles after working hours were unanswered, and the company didn’t immediately reply to emails. An attempt to reach Mr Riza directly was unsuccessful.

1MDB said on April 3 it had “never invested in nor transferred funds to Red Granite Pictures, whether directly or via intermediaries” and has denied any wrongdoing over its finances.