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    Sep 21, 2015

    FBI 'launches investigation into 1MDB'


    THE United States Federal Bureau of Investigation (FBI) has launched an investigation into allegations of money laundering at the debt-ridden Malaysian state fund 1Malaysia Development Berhad (1MDB), the Wall Street Journal (WSJ) reported yesterday, citing an unidentified source.

    The scope of the investigation into 1MDB was not clear, said the US-based newspaper, which cited "a person familiar with the matter".

    The news about the investigation came some two days after a former member of Malaysia's ruling United Malays National Organisation (Umno) was arrested just before travelling to New York, where he planned to make a police complaint and urge the US authorities to look into the money-laundering allegations.

    Khairuddin Abu Hassan, who had raised questions about money transfers into Prime Minister Najib Razak's personal account, was arrested on charges of attempting to undermine parliamentary democracy, his lawyer Matthias Chang said.

    Mr Khairuddin, who insisted that he had acted in the country's best interests, had earlier handed over evidence to the Swiss authorities, who had frozen funds in Swiss banks amid investigations into 1MDB, reported news website The Malaysian Insider.

    A spokesman for the FBI's New York office said that no agent in the office had arranged to speak with Mr Khairuddin or had any previous contact with him, said the WSJ.

    1MDB's advisory board is chaired by Mr Najib.

    The fund has been dogged by controversy over its US$11 billion (S$15 billion) debt and alleged financial mismanagement.

    Investigations on 1MDB are under way in Switzerland and Hong Kong as the scandal widens.

    The WSJ reported in July that investigators looking into 1MDB had found that nearly US$700 million was transferred into the personal bank account of Mr Najib ahead of the close election in 2013.

    Mr Najib has denied taking money from 1MDB or anywhere else for personal gain.

    Malaysia's anti-graft agency declared the funds a political donation, but without specifying the donor, said to be from the Middle East.

    Mr Najib has faced unprecedented criticism from within Umno, in particular from former prime minister Mahathir Mohamad, who has called on him to step down.

    On Friday, Dr Mahathir publicly mentioned the possibility of Mr Najib being arrested by Interpol if foreign countries investigate him for alleged money laundering.

    "He could also be arrested if he leaves the country. So he has to remain here, like how he withdrew the passports of some people and barred them from going overseas," Dr Mahathir said at a meeting in Kuala Lumpur with a non-government organisation.

    The video of the meeting was uploaded on the blog Din Turtle yesterday.

    Dr Mahathir cited the fate of Sudanese President Omar al-Bashir, who is now wanted by the International Criminal Court to stand trial on various charges such as the genocide in Darfur.