Najib to sue over 1MDB cash allegations

Najib to sue over 1MDB cash allegations

KUALA LUMPUR — Malaysian Prime Minister Naib Razak is preparing to sue the <i>Wall Street Journal</i> over a report that the troubled state investment fund channeled US$700 million into his personal accounts.

The report amounted to criminal defamation, the prime minister’s political secretary, Muhammad Khairun Aseh, was quoted as saying by the Malay-language newspaper Sinar Harian.

"The report was done with bad intention and unsubstantiated and based on poor and dubious sources," he said. "We will take legal action."

Mr Najib said late Friday that the documents on which the report was based were doctored.

The Journal said its report was based on "solid" and "reliable" documents that had been seen by top government officials investigating the finances of 1 Malaysia Development Berhad (1MDB).

Ken Brown, the US newspaper's Hong Kong bureau chief, told CNBC television that the documents "had been shared with the Malaysian attorney-general, with others in the government so they’ve been seen by all and also the prime minister".

The information obtained by the newspaper, he said, came from "a very reliable investigation and not a political investigation".

The Tun Razak Exchange, billed as the new financial hub of Kuala Lumpur, is among the ventures being backed by the troubled state investment fund 1 Malaysia Development Berhad (1MDB). (AP Photo)

The Journal reported earlier this week that $700 million had been moved among various government agencies, banks and companies before it ended up in Mr Najib's personal accounts.

It said the documents included bank transfer forms and flowcharts put together by investigators seeking to shed light on 1MDB’s cash flow.

The Journal was not the first media organisation to raise questions about the affairs of 1MDB. The allegations of a direct link to the embattled premier first surfaced on the controversial London-based whistleblower website Sarawak Report.
 
1MDB has denied funneling funds into Mr Najib's personal accounts, rejecting reports saying investigators believed they had found such a money trail.

The Prime Minister’s Office said the claims were part of a "political sabotage" campaign by some individuals seeking to remove Mr Najib from office.

Investor confidence in Malaysia has been battered by growing scrutiny over Mr Najib’s management of debt-ridden 1MDB, whose advisory board he chairs. In a period of less than five years since it was set up, the company accumulated debt of 41.9 billion ringgit ($11.1 billion).

Mr Najib has resisted calls from former premier Mahathir Mohamad to step down over the debacle.

"I have never taken funds for personal gain as alleged by political opponents," the prime minister said in a posting on his Facebook page late Friday. The documents on which the newspaper report is based were doctored, he said.

Mr Najib blamed Dr Mahathir for orchestrating the attacks against him for the latter's personal demands. He said the 89-year-old former prime minister had "created a crisis" by recklessly claiming that 42 billion ringgit was missing from 1MDB.

The government ordered the Auditor-General to verify 1MDB's accounts in March and Mr Najib asked investigators to expedite the process in May. The Auditor-General said on Thursday it had completed an interim report and will submit it on Thursday to a parliamentary committee that is also probing 1MDB.

Bank Negara Malaysia said last month that it had started a formal inquiry into 1MDB to examine "any contravention of the central bank’s rules and legislation". The central bank also declined to comment on the report.

The government investigation did not provide details on what happened to the money in what may be Mr Najib’s accounts, while the original source of the funds was unclear, the Wall Street Journal said.

Opposition leader Wan Azizah Wan Ismail demanded that the premier declare his assets publicly in a sworn statement. "[We] will press for an independent inquiry into these allegations", she added.

The revelations come at a time when the government is trying to pare down 1MDB’s debt and wind down its operations through asset sales. The company repaid a $975-million syndicated loan led by Deutsche Bank in June using funds from Abu Dhabi’s state-owned International Petroleum Investment Co, which provided the money as part of an agreement involving an exchange of assets and liabilities with 1MDB.

Thai police, meanwhile, are gathering evidence against a former executive of PetroSaudi International after he was detained in the country for allegedly extorting money and leaking information on 1MDB.

Xavier Justo is also alleged to have given information about the two companies to Sarawak Report.

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