Malaysia Authorities Arrest Ex-Premier Over 1MDB Corruption Claims

Tom Burroughes

4 July 2018

Almost inevitably after he was kicked out of office in May, former Malaysian Prime Minister Najib Razak has been arrested in Kuala Lumpur as part of a probe into alleged theft and money-laundering at the state investment fund, media reports said.

Najib is accused of using the state-run fund as a conduit for personal financial dealings, and of siphoning off millions of dollars. He has denied the claims. Illicit transactions via 1MDB have led to anti-money laundering investigations in Switzerland, Singapore, Luxembourg and the US, among others. In Singapore, for example, Falcon Private Bank and the local arm of BSI were ordered to cease operating in the city-state. It is understood such probes are continuing.

Najib's family lawyer reportedly told Channel News Asia on Tuesday that the ex-leader would be charged for his role in the 1MDB scandal the next day. Earlier on Tuesday, Malaysia's anti-corruption agency questioned Riza Aziz, the stepson of Najib and a Hollywood film producer.

As this publication noted after the 9 May elections that saw Mahathir Mohamad take power, the hunt for dirty money would figure high on the national agenda. Corruption had been a major theme in the election campaign.

Reports said Malaysia’s Anti-Corruption Commission, which is looking into allegations of corruption at 1MDB, said that 408 bank accounts involving almost $370 million had been frozen. The accounts were linked to 81 individuals and 55 companies, the agency said.

Mahathir’s government is seeking to recover up to $4.5 billion that was allegedly siphoned off from 1MDB. Police last week said that jewellery, designer handbags, cash and other luxury goods, which had been seized in raids on residences linked to Najib, were worth up to US $273 million.