Malaysia serious about good governance, PM says in face of US investigations

KUALA LUMPUR: Malaysia is serious about good governance and has vowed to fully cooperate with a US investigation into a $3.5 billion (Dh12.85bn) scandal involving a state fund he headed, the prime minister Najib Razak said on Thursday.

A day earlier, the US department of justice revealed that it had initiated action to seize about $1.3bn of the missing $3.5bn allegedly used by people close to Mr Najib to buy US assets.

Singapore on Thursday also said it had seized nearly $180 million linked to state-fund 1Malaysia Development Berhad (1MDB).

The back-to-back announcements from both countries are the clearest and most damning steps yet taken in more than a year of Malaysian tumult over 1MDB, which was founded and overseen by Mr Najib.

“Allow the process to take its course, but I want to say categorically that we are serious about good governance,” Mr Najib said. His statement, however, is going to carry little weight with his detractors who accuse him of being behind the alleged misappropriation of the funds.

The opposition responded on Thursday saying it will mobilise the public for a “political action” if Mr Najib does not immediately go on leave of absence.

Pakatan Harapan, from the opposition coalition, also asked Mr Najib to convene an emergency parliamentary sitting to provide a full explanation, following revelations by US prosecutors.

Mr Najib has consistently denied allegations of wrongdoing.

The state fund was created in 2009 by Mr Najib shortly after he took office to promote economic development projects. Instead, US prosecutors said, fund officials diverted more than $3.5 billion through a web of shell companies and bank accounts in Singapore, Switzerland, Luxembourg and the United States.

The justice department says it wants to seize some $1.3bn of that money, which officials were able to trace through the US financial system. It says the forfeiture demand is the largest single action it has taken.

The money was used to pay for luxury properties in New York and California, a $35 million jet, art by Vincent Van Gogh and Claude Monet and helped finance the Hollywood film, The Wolf of Wall Street, according to the justice department complaints.

“We will not allow the United States to become a playground for the corrupt,” said Eileen Decker, the US attorney in LA. “And we will not allow it to be a platform for money laundering or a place to hide and invest in stolen riches.”

Mr Najib said he viewed the US action seriously but pointed out that it was limited to the individuals named in the complaints. He said his government will “fully cooperate” with US authorities.

The complaints identify by name several people close to Mr Najib. Among them is his stepson, Riza Shahriz Abdul Aziz, who co-founded movie production studio Red Granite Pictures, and businessman Low Taek Jho, who is close to their family. The complaint describes Mr Riza as a relative of an unnamed “Malaysian Official 1” whose approval was needed for the fund’s financial commitments.

“We have to establish facts first. This is a civil action, this not a criminal action. Those people involved will have their say through the court process in the United States,” Mr Najib said.

 Opposition leaders have taken “Malaysian Official 1” to mean Najib.

“It does not take a rocket scientist to figure it out. It’s our prime minister,” Ambiga Sreenevasan, an activist lawyer, said on Thursday, which was also addressed by former Prime Minister Mahathir Mohamad, a one-time Najib mentor and now one of his biggest critics.

Mr Mahathir has called for a peaceful rally to demand the prime minister’s removal. * Associated Press, with additional reporting from Agence France-Presse and Reuters

Source: The National. Date: July 21, 2016