Tue, May 15, 2018 - Page 5 News List

Najib faces wrath over 1MDB secrets

BLACKLISTED:Former prime minister Najib Razak’s plans to fly out of Malaysia on Saturday drew angry crowds, and prompted the new prime minister to bar him from traveling

Bloomberg

As Malaysia’s most powerful man, Najib Razak worked hard to keep the public from accessing information about a multibillion-dollar scandal at state investment fund 1Malaysia Development Bhd (1MDB). Now, they just might find out all the juicy details.

Only three days after 92-year-old Mahathir Mohamad secured a shocking election win, he barred Najib from leaving Malaysia and said he would reopen a graft probe targeting the fund.

He also said he was replacing the attorney general who cleared Najib and instructed the auditor general to declassify a 1MDB report that was protected by the Official Secrets Act.

It is a stunning turn of events for Najib, who has long denied any wrongdoing and aggressively hit back at detractors after 2015 revelations that about US$700 million — alleged to be 1MDB funds — appeared in his personal accounts before the previous election in 2013. Najib had fired his top prosecutor, expelled four Cabinet ministers who defied him, filed defamation lawsuits and blocked Web sites of critical media outlets.

A revitalized probe would reverberate around the world, with investigations ongoing in a number of nations.

The US has alleged that the fund’s officials laundered more than US$4.5 billion through a complex web of opaque transactions and fraudulent shell companies located from Switzerland to Singapore to the US — a scheme that US Attorney General Jeff Sessions in December called “kleptocracy at its worst.”

The US Department of Justice has sought to seize about US$1.7 billion in assets that it says were illegally acquired with 1MDB cash, and Singapore and Switzerland reprimanded banks such as UBS Group AG and JPMorgan Chase & Co for lapses over money laundering.

“If there are any fresh transactions uncovered, this could trigger off related money-laundering criminal and civil investigations worldwide,” said Nizam Ismail, head of regulatory practice at RHTLaw Taylor Wessing LLP in Singapore.

INVESTOR CAUTION

Malaysia’s financial markets reopened with a roller-coaster ride yesterday. While the ringgit and stocks initially tumbled, both recovered as trading continued, with analysts pointing to reassurance from Mahathir’s economic appointments.

The FTSE Bursa Malaysia KLCI Index was up 1.1 percent at 3:29pm, after sliding as much as 2.7 percent, and the currency was flat after a drop of about 1 percent against the US dollar.

The government is to formulate an economic policy that restores investor confidence in Malaysia after the 1MDB scandal, Penang Chief Minister Lim Guan Eng, Malaysia’s finance minister, said in a briefing on Sunday in Penang.

The latest drama unfolded on Saturday after reports emerged that Najib planned to fly to Indonesia with his wife in a private jet, prompting an angry crowd to gather at a local airport.

Hours later, the immigration department said it had blacklisted Najib, and Mahathir confirmed that he personally placed travel restrictions on his former protege.

‘VERY COMPLEX’

Najib said he would respect the order, and apologized “for any shortcomings and mistakes.”

By nightfall, he had quit his position as leader of the United Malays National Organisation, which until last week had run the nation since independence in 1957.

Mahathir has said his predecessor “will have to face the consequences” for any wrongdoing with 1MDB, which was first set up in 2009 to fund infrastructure projects with Najib as chairman of its advisory board.

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