Malaysia PM denies links between state fund & US case

By P Prem Kumar

KUALA LUMPUR

Malaysia's prime minister says 1Malaysia Development Bhd (1MDB) has no direct links with a recent civil case filed by the United States Department of Justice (DOJ), defending the embattled state fund against allegations of misappropriating public funds into assets.

On Friday, Najib Razak underlined to reporters that 1MDB -- his brainchild -- is not directly involved in the civil suit which seeks the forfeiture and recovery of more than $1 billion in assets based in the U.S., linked to what was described by the DOJ as an "international conspiracy to launder funds misappropriated" from the fund.

"This means that 1MDB is not directly involved in the civil suit. In other words, there are no 1MDB assets in the U.S., and therefore 1MDB is not included in the list," he told reporters after chairing a supreme council meeting of his political party United Malays National Organisation (UMNO).

Razak said the UMNO supreme council had acknowledged that there were specific people named in the DOJ report, and that 1MDB was not included.

The premier also questioned the unprecedented publicity that was given to the announcement of the civil suit, calling it unprecedented, as civil suits were usually "low key".

"I don't know [why the publicity]. I don't want to speculate. We have some opinion about it, but I wouldn't want to speculate publicly," he said.

In a press statement a fortnight ago, the DOJ described the case as the largest ever brought by the Kleptocracy Asset Recovery Initiative.

Prosecutors said more than $3.5 billion in 1MDB funds were allegedly misappropriated by high-level officials of the local state investment firm and their associates between 2009 and 2015.

The money was allegedly laundered through "complex transactions and fraudulent shell companies" with bank accounts located in Singapore, Switzerland, Luxembourg and the U.S., it claimed.

U.S. prosecutors allege that the money was embezzled and laundered into the U.S., from where it was used to buy luxury properties, paintings by Vincent Van Gogh and Claude Monet, a $35 million jet, to pay off gambling debts in Las Vegas, to invest in EMI Music and to fund the production of 2013 Hollywood movie The Wolf of Wall Street.

Among those named in the lawsuit were the movie's co-producer and Razak's stepson Reza Aziz, a Malaysian businessman linked to Razak, Jho Low, and prominent Middle East businessmen Khadem Abdulla Al-Qubaisi and Mohammed Ahmed Badawy Al-Husseiny.

In July 2015, the Wall Street Journal and whistle blower site Sarawak Report released reports quoting documents, which they claimed to be from the ongoing 1MDB probe, claiming $700 million (or 2.67 billion Ringgit) moved among 1MDB-linked government agencies, banks and entities before finally ending up in Razak’s personal accounts in five separate deposits.

Razak immediately said that he had not swindled funds for personal gain -- as alleged by political opponents -- be they from 1MDB, the finance ministry's SRC International -- a former 1MDB subsidiary -- or other entities.

A month later, the Attorney-General Chambers ruled that the funds were political donations to the Razak-led UMNO for the party to remain in power during the last general election.

Politicians within UMNO proudly declared that the funds came from "Middle East Royals" who wanted UMNO to retain control.

Razak, however, kept silent on the matter, saying political donations were confidential and he would only reveal the donors if opposition parties agreed to follow suit.

On Jan. 26, Malaysia’s Attorney General Apandi Ali ruled out wrongdoing by Razak in connection with the “political donation".