Malaysia Corruption News

Thursday, July 21, 2016

Malaysia's Najib unmoved after U.S. lawsuits linked to 1MDB scandal

Although U.S. prosecutors say billions of dollars were stolen from a state investment fund that Malaysian Prime Minister Najib Razak founded and oversaw, his government was unmoved on Thursday by the allegations.

U.S. prosecutors said on Wednesday over $3.5 billion was diverted from the 1Malaysia Development Berhad (1MDB) fund that Najib founded in 2009 shortly after coming to power. The U.S. civil lawsuits are seeking to seize $1 billion of the allegedly embezzled assets that were transferred into the United States using shell companies.

The lawsuit does not name Najib but refers to a "Malaysian Official 1" - described as a high-ranking government official - who received some of the misappropriated funds, including $681 million in March 2013. A source familiar with the investigation later confirmed that "Malaysian Official 1" is Najib.

Political risk consultants Eurasia said since Najib was not directly named in the lawsuits that "will afford him protection".

"Najib has become accustomed to weathering international investigations," Eurasia said in a note to clients.

"Najib supporters placed in key positions across government (including in the Attorney General's office and the anti-corruption commission) will continue to shield the prime minister from any probe by blocking access to information or evidence that could implicate him," the note said.

Read more on Reuters

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1MDB scandal: Singapore uncovers lapses at DBS, UBS, Standard Chartered

DBS, UBS and Standard Chartered have become embroiled in the scandal surrounding 1MDB, with Singapore's central bank saying it had found lapses and weaknesses related to the beleaguered Malaysian wealth fund.

The Monetary Authority of Singapore (MAS) said on Thursday that it found "lapses and weaknesses" in anti-money-laundering controls at the banks' Singapore operations and that it would be taking actions against them.

The preliminary investigation found "extensive layers of transactions and subterfuge aimed at disguising the nature of certain activities and fund flows," with shell companies in various jurisdictions used to conceal the funds' true beneficiaries.

In May, the MAS also completed a related investigation of BSI Singapore, which resulted in a decision to shut down that private bank, calling it at the time "the worst case of control lapses and gross misconduct that we have seen in the Singapore financial sector."

The MAS said the deficiencies at the three banks were related to lapses in specific processes and by individual officers, which would be met by "firm regulatory action," but the central bank added that the inspections didn't find pervasive weakness or staff misconduct, unlike at BSI Bank.

Read more on CNBC

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1MDB scandal: 'Will the real Malaysian Official 1 please stand up?'

After years of speculation and allegations of corruption, Malaysians woke up to a major development in the 1MDB scandal.

The US Department of Justice said it would seize more than $1bn (£761m) in assets from the state fund and alleged that "Malaysian official 1" received hundreds of millions of dollars from 1MDB.

The individual, who was not named but was referenced 32 times, was described as a "high-ranking official in the Malaysian government".

Many Malaysians believe that the reference is to Prime Minister Najib Razak and the term started being used as a replacement for his name on social media. Mr Najib has always denied all wrongdoing.

'Will the real Malaysian Official 1 please stand up?'

Read more on BBC

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Malaysia has been betrayed by Prime Minister Najib Razak

I have argued time and again that the greatest threat to the Muslim world is not the West, but rather, corruption and incompetence in administration in the Muslim countries themselves.

To this argument there were a number of crucial pieces of evidence. First of all, there is a clear inverse correlation between corruption and economic development not just in the Middle East, but globally. Secondly, Muslim countries are among the most corrupt countries in the world, and this maps well to the problems we know well from the region.

In this sense, the abundance of natural resources has served to mask much of the problem, as per capita wealth in the region comes out as much higher than it would have been for a given level of corruption, and that distorts the perception of societal problems in these countries.

For another, that abundance of wealth can be used to buy off the acquiescence of the population to an otherwise questionable regime, as is the case with the benefits that these states lavish upon their population, or alternatively, can be used to fund extensive repressive police and intelligence apparatuses to keep the population in check, as was the case in Saddam-era Iraq.

But there was also plenty of converse evidence, specifically states on the periphery of the Islamic world which did not conform the region’s reputation for corruption. Most notably, we had the examples of Turkey and of Malaysia.

Wednesday, July 20, 2016

1MDB: Malaysia 'will co-operate' with US investigation

The office of Prime Minister Najib Razak has said Malaysia will "fully co-operate" with any lawful investigation into scandal-hit state fund 1MDB.

US authorities moved on Tuesday to seize more than $1bn (£761m) in assets from the fund set up by Mr Najib to transform Malaysia into a banking hub.

Mr Najib is not named directly in the papers but "Malaysia official 1" is identifiable as someone whose account allegedly received funds.

He has always denied any wrongdoing.

Mr Najib was officially cleared of criminality by the country's attorney general earlier this year.

The court papers, filed in Los Angeles, allege that misappropriated 1MDB money was laundered through accounts in the US.

The US justice department alleges the money financed lavish lifestyles of "multiple individuals including public officials".

FBI Deputy Director Andrew McCabe told reporters in Washington: "The Malaysian people were defrauded on an enormous scale."

If successful, the US justice department intends to seize assets including property in the US, UK and Switzerland.

There is no allegation that Mr Najib spent any of the money but people close to him are accused of using billions of dollars to buy jewellery, art and luxury properties; pay gambling expenses; and hire musicians and celebrities to attend parties.

Read more on BBC

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