Malaysian PM linked to $700-M graft

KUALA LUMPUR—A task force investigating Malaysia’s troubled state investment fund 1MDB said yesterday it had frozen half a dozen bank accounts following a media report that nearly $700 million had been transferred to an account of Prime Minister Najib Razak.

The Wall Street Journal (WSJ) reported last week that investigators probing the debt-laden 1MDB had traced nearly $700 million to bank accounts they believed belonged to the prime minister.

Reuters could not independently verify the WSJ report.

Najib has denied taking any money from 1MDB or any other entity for personal gain, and is considering legal action.

The special task force said it had frozen six bank accounts in relation to the allegations, but it did not specify whose accounts they were or the banks involved.

The team also took possession of documents related to 17 accounts from two banks to help with the investigations.

Former Prime Minister Mahathir Mohamad, who was once Najib’s patron and remains highly influential, weighed into the scandal yesterday saying Najib had shamed Malaysia.

“Truly, the one who shamed the country is Najib with his 1MDB. Prior to this, the country has never been insulted by unanswered allegations, unlike now,” Mahathir said in a blog.

Malaysia’s longest-serving prime minister has repeatedly demanded Najib account for the disappearance of billions of dollars borrowed by state fund 1MDB or resign.

Malaysian opposition lawmakers have accused authorities of blocking a planned meeting in parliament to discuss the allegations against Najib, which threaten to become the biggest political crisis in the country’s history.

Meanwhile, members of Najib’s party, the United Malays National Organization (UMNO), have closed ranks behind the prime minister, who had already been on a back foot over the mismanagement of 1MDB and his handling of the economy.

1MDB, whose advisory board is chaired by Najib, has debts of nearly $11.6 billion. Even before the WSJ report it was the subject of separate investigations by the central bank, auditor general, police and the parliament’s Public Accounts Committee.

The Wall Street Journal, citing documents from a government investigation, said there were five deposits into Najib’s account. It said the two largest transactions, worth $620 million and $61 million, were made in 2013 from a company registered in the British Virgin Islands via a Swiss bank.

1MDB has described the allegations as “unsubstantiated,” saying it never provided funds to the prime minister.