Swiss widen corruption investigation into Malaysia's 1MDB fund

Switzerland has widened its corruption probe into a Malaysian state-owned fund linked to prime minister Najib Razak, with two new suspects indicted over an alleged phony bond deal.
The Swiss attorney general’s office (OAG) said the new suspects – who are accused of fraud, bribery and other offences – are officials from the United Arab Emirates who were in charge of sovereign funds based in Abu Dhabi.

In a statement, the OAG said it had evidence that the management of the 1MDB fund violated Swiss embezzlement laws through a fraudulent bond agreement with the UAE officials, with money routed through Swiss banks.

Allegations that billions were looted from 1MDB in a vast campaign of fraud have shaken Najib’s government.

The scandal intensified last week when a Malaysian parliamentary committee clearly suggested misconduct had occurred, in the first condemnation from an official body in Kuala Lumpur.

Switzerland opened its own criminal probe into 1MDB last August, targeting two former Malaysian officials “and persons unknown” on suspicion of bribery, money laundering and other offences.
The OAG has said that up to $4bn of public funds in Malaysia may have been misappropriated, with a portion of the money transferred to Swiss accounts controlled by former Malaysian officials and people based in the UAE.

Concerning the latest allegations, Swiss authorities are scrutinising bonds issued by 1MDB subsidiaries officially intended to finance electric power plant projects in Malaysia.

Read more on The Guardian

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How Malaysia's 1MDB Fund Scandal Reaches Around the World

State investment company 1Malaysia Development Bhd., or 1MDB, has been making headlines in Malaysia and around the world in the past year, mainly for the wrong reasons. There are probes reported in at least ten countries related to 1MDB, or on companies and individuals linked to it.

Investigations surrounding 1MDB center on alleged financial irregularities and possible money laundering. Both 1MDB and Prime Minister Najib Razak have consistently denied wrongdoing, and the fund continues to state that no foreign legal authorities have contacted them on any of these investigations. Here's a snapshot of the various probes.

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Malaysia: directors of scandal-hit 1MDB state investment fund offer mass resignation

Parliamentary inquiry finds extensive mismanagement but does not mention PM Najib Razak, who was behind creation of debt-laden fund.

The heavily indebted Malaysian state investment fund 1MDB has said its entire board of directors has offered to resign, after a parliamentary inquiry found extensive mismanagement and called for a police investigation into the fund’s former head.

In a report submitted in parliament on Thursday, the public accounts committee said it found 1MDB’s financial performance “unsatisfactory”. The fund’s debts ballooned from 5bn ringgit (£906m) in 2009 to 50bn ringgit this January.

It said 1MDB’s business model depended heavily on debt, mainly bank loans and bonds, part of which are guaranteed by the government. Such heavy reliance on debts for working capital should never have been allowed, the report said.

The report did not mention the prime minister, Najib Razak, who was behind the creation of 1MBD in 2009 and has been battling allegations that hundreds of millions of dollars was channeled from the fund into his personal bank accounts.

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How Malaysia's 1MDB Fund Scandal Reaches Around the World

1MDB: The case that's riveting Malaysia

Opponents of Malaysian PM join hands to oust him

Leaders from across Malaysia's political spectrum and hundreds of their supporters led by former longtime Prime Minister Mahathir Mohamad have rallied in Kuala Lumpur, calling for the removal of the current prime minister over a $700m corruption scandal.

Opponents of Najib Razak said on Sunday that they planned to petition the country's Islamic royalty seeking the removal of the scandal-plagued prime minister, who has been mired into graft allegations to the tune of $700m.

"(Najib's) leadership undermines the very existence of our institutions," said 90-year-old Mahathir, who dominated Malaysia as prime minister for 22 years before retiring in 2003.

"We want the rule of law, and the actions of Najib have destroyed it. He no longer deserves to be the prime minister," Mahathir said at the gathering attended by leaders from the ruling party, opposition and civil society.

The highly unusual grouping of heavyweights from both from the ruling party and the opposition groups was formed in early March, when it issued a call to "save" Malaysia from disaster by removing Najib.

Former deputy prime minister Muhyddin Yassin and Democratic Action Party senior leader Lim Kit Siang were to speak at the gathering as well, the DPA news agency reported.

Jailed opposition leader Anwar Ibrahim has endorsed the movement, despite a history of conflict with Mahathir.

Najib has been under pressure to resign since July, after the Wall Street Journal newspaper suggested that nearly $700m in his bank accounts came from the state-funded 1Malaysia development fund.

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Malaysia 1MDB scandal: Singapore seizes bank accounts

The authorities in Singapore say they have seized a large number of bank accounts as part of an investigation into possible money-laundering linked to a fund owned by the Malaysian state.

The fund is called 1Malaysia Development Berhad (1MDB).

It was established in 2009 to pay for major new economic and social developments in Malaysia.
Singapore said it would not tolerate being used as a refuge for illicit funds.

In a joint statement by its central bank and the police's anti-fraud agency it said: "In connection with these investigations, we have sought and are continuing to seek information from several financial institutions, are interviewing various individuals, and have seized a large number of bank accounts.

"Singapore is also cooperating closely with relevant authorities, including those in Malaysia, Switzerland and the United States."

Last year, officials in Singapore froze two bank accounts as part of its investigation.

The announcement follows news that around $4bn (£2.8bn), earmarked for investment in economic and social development projects in Malaysia, may have been misappropriated from state-owned companies.

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