Malaysia arrests third man for investigation on 1MDB

Signage for 1Malaysia Development Bhd (1MDB) is displayed at the site of the Tun Razak Exchange project in Kuala Lumpur, Malaysia.
Signage for 1Malaysia Development Bhd (1MDB) is displayed at the site of the Tun Razak Exchange project in Kuala Lumpur, Malaysia. PHOTO: BLOOMBERG

KUALA LUMPUR - Malaysia's high-level multi-agency team probing irregularites at 1Malaysia Development Berhad (1MDB) has detained a third man this week linked to the troubled state investor, whose financial troubles are threatening the leadership of Prime Minister Najib Razak.

A source involved in the special taskforce told The Straits Times that a 28-year-old company director was arrested on Thursday night by the Malaysian Anti-Corruption Commission (MACC). He will be remanded for four days.

"This is for the same investigation as the earlier two arrests," the source said, referring to two other executives remanded earlier this week.


The MACC on Tuesday arrested the managing director of a company "to aid in investigations linked to SRC", a Finance Ministry firm named in the July 3 report by the Wall Street Journal (WSJ) alleging that US$700 million (S$958 million) linked to debt-ridden 1MDB was deposited in private accounts belonging to Datuk Seri Najib.


MACC said the detainee is the managing director of Ihsan Perdana, a company engaged to run corporate social responsibility programmes for 1MDB.


According to the WSJ, RM42 million (S$15 million) from SRC International - a 1MDB subsidiary before coming under full ownership of the Finance Ministry in 2012 -  ended up in Mr Najib's personal accounts via Ihsan Perdana.

On Monday, the Malaysian authorities made their first arrest when they detained a director of a construction firm, Mr Jerome Lee, at the Kuala Lumpur International Airport.

His lawyer Shafee Abdullah said his client was picked up by MACC officers as he was about to leave for Taiwan on Monday morning.

Mr Lee, who was remanded for four days, was released on RM100,000 bail on Friday.

Since the allegations of state fund transfers surfaced in WSJ, the task force - which also includes the central bank, police and public prosecutor - has frozen six bank accounts and raided the headquarters of 1MDB.

The state investor has struggled to meet financing obligations after racking up RM42 billion in debt in its first five years of operations.

Mr Najib, who chairs 1MDB's advisory board, has denied ever using public funds for "personal gain" but has failed to clarify if the money was indeed deposited into his personal bank accounts.