1MDB: Malaysia’s extraordinary financial scandal
KUALA LUMPUR: Malaysia’s extraordinary 1MDB corruption scandal allegedly saw top officials loot billions from state coffers and go on a worldwide spending spree-buying a $250 million yacht and a painting by Van Gogh, and financing a Hollywood blockbuster. Najib Razak, the then-prime minister, was a key figure in the plundering of sovereign wealth fund 1Malaysia Development Berhad (1MDB), and was convicted Tuesday in his first corruption trial linked to the fraud.
What was 1MDB?
1MDB was a state investment fund which Najib launched in 2009 shortly after becoming prime minister. Its portfolio included power plants and other energy assets in Malaysia and the Middle East, as well as real estate in Kuala Lumpur. The fund was closely overseen by Najib. Whistleblowers say Low Taek Jho, a jet-setting Malaysian financier close to Najib but with no official position, helped set up 1MDB and made key financial decisions.
Concerns escalated in 2014 as 1MDB slid into an $11-billion debt hole, and intensifying public scrutiny revealed missing funds. The scandal first came to light through the Sarawak Report news portal, and gained further traction in 2015 when The Wall Street Journal published documents showing Najib received at least $681 million in payments to his personal bank accounts. The US Justice Department launched its own probe after claims that stolen Malaysian public money was laundered through the US financial system, and has filed lawsuits seeking some $1.8 billion in assets allegedly purchased with the cash. The department said more than $4.5 billion was stolen from 1MDB between 2009 and 2015 by high-level officials at the fund and their associates.
Tens of millions of dollars were used in 2012 by Najib’s stepson Riza Aziz, an aspiring film producer, to fund the Hollywood film “The Wolf of Wall Street”, starring Leonardo DiCaprio. Hundreds of millions were also used, mainly by Riza and Low, to purchase high-end real estate in Beverly Hills, New York and London. — AFP