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Malaysia Punishes Ex-Premier's Brother, Others As 1MDB Saga Rumbles On

Tom Burroughes

8 October 2019

Malaysia has fined the brother of former Prime Minister Najib Razak and other people and companies for allegedly receiving money from state fund 1MDB, Reuters and other media quoted the country’s anti-corruption chief as saying yesterday. 

Malaysian Anti-Corruption Commission chief commissioner Latheefa Koya spelled out the action taken against individuals including Najib’s brother Nazir Razak, the former chairman of Malaysia’s second-largest bank, CIMB group Holdings, and Shahrir Abdul Samad, former chairman of state palm oil agency Felda and also a minister in Najib’s cabinet.

A number of individuals are accused of siphoning off billions of dollars from the Malaysian fund. The scandal has spread wide, with banks in jurisdictions such as neighbouring Singapore punished for failings in anti-money laundering controls. Authorities in the US, Singapore, Switzerland and other places have been probing financial flows linked to 1MDB. In a bizarre twist that blends fact and fiction, money from the fund was even used to finance the Hollywood film about a fraudster, The Wolf of Wall Street.

Malaysian and US investigators say about $4.5 billion was taken from 1Malaysia Development Berhad, to give its full name, which was set up in 2009 by Najib.

Last year, Najib lost power in a shock result, raising the prospect of bribery and money laundering charges alleging that he received about $1.0 billion in 1MDB money. He denies the charges. The election resulted in veteran Malaysian politician Mahathir Mohamad regaining power.

Reuters reported Latheefa Koya saying that MYR420 million ($100 million) was received by a total of 80 individuals and entities from 1MDB. She did not specify how much the fine amount was.

“We have issued compound notices against all of these people and entities for the purpose of them to pay up the fine,” she told reporters, adding that they could be fined up to 2.5 times the amount received.

As previously reported, Malaysia has sued US investment firm Goldman Sachs over its role as underwriter and arranger of three bond sales that raised $6.5 billion for 1MDB.