Ousted Malaysian government accused of covering up state fund scandal

Wednesday, 23 May 2018 00:00 - - {{hitsCtrl.values.hits}}

Kuala Lumpur (Reuters): The government of ousted Malaysian Prime Minister Najib Razak deceived parliament over the finances of state fund 1MDB and suppressed an investigation by intimidating and purging anti-corruption agents, officials said on Tuesday.

“It is clear that the previous government has conducted an exercise of deception to the public about certain hot-button items, especially 1MDB, and even misrepresented the financial situation to parliament” new Finance Minister Lim Guan Eng said in a statement.

Lim said he had discovered that Malaysia has been “bailing out” 1Malaysia Development Berhad (1MDB) debt obligations since April 2017, but the true financial situation was still unclear because officials were unable to access certain “red files”.

The bailout had cost 6.98 billion ringgit ($1.8 billion) so far, but more payments of 954 million ringgit would fall due by November, and from 2022 Malaysia would be required to make further payments running into billions of ringgit, Lim said.

Earlier, the head of the Southeast Asian country’s anti-graft agency gave an explosive account of how witnesses disappeared and officers were purged and intimidated after they tried in 2015 to charge Najib for siphoning funds from 1MDB.

Najib has consistently denied any wrongdoing since the 1MDB scandal erupted in 2015, but he replaced an attorney-general and several Malaysian Anti-Corruption Commission (MACC) officers to shut down the initial investigation.

Describing the lengths taken to suppress an investigation at the time, Shukri Abdull - who was restored to the agency following Najib’s shock election defeat on May 9 - said that on one occasion a bullet was sent to his home.

Shukri was addressing a news conference after Najib arrived at the headquarters of the MACC, which has ordered him to explain transfers of $10.6 million into his bank account.

Shukri said he had called Najib into the agency to record a statement, not to arrest or charge him.

Several hours later, Najib emerged from the MACC headquarters and spoke briefly to reporters, saying he would be returning to complete his statement on Thursday.

Najib said he had amplified on a statement made to the agency in 2015 “with verification of documents and several more complete details”.

The MACC action is just the beginning of a new probe into the alleged theft of billions of dollars from 1MDB, a scandal that dogged the last three years of Najib’s near-decade-long rule and was a key reason why voters dumped him.