Malaysian Prime Minister Najib Tun Razak spent millions of dollars on luxury goods and gave millions more to politicians, think tanks and lawyers from bank accounts to which funds from state investment fund 1MDB were diverted, the Wall Street Journal reported on Wednesday (March 30), citing an investigation by Malaysian authorities.
The newspaper said investigation documents it viewed contain bank-transfer information that shows more than US$1 billion, the majority of it originating from state investment fund 1MDB, entered into five accounts belonging to Mr Najib at AmBank, a Malaysian bank, between 2011 and 2015.
It said the documents also show for the first time how some of the money in Mr Najib’s accounts was allegedly used for personal expenses, including clothes, jewellery and a car at stores in the US, Malaysia, Italy and elsewhere.
Mr Najib, 63, did not respond to WSJ's requests for comment. The premier has vigorously denied wrongdoing since the newspaper first published allegations last July that US$681 million from 1MDB, which has racked up debts of US$11 billion (S$14.87 billion) since being set up by Mr Najib in 2009, was transferred to his bank account in 2013.
1MDB denied on Thursday (March 31) WSJ's latest allegation that it transferred funds to the prime minister's personal account.
"1MDB has consistently maintained that it has not paid any funds to the personal accounts of the Prime Minister," the organisation said in a statement posted on its website.
"Despite this, the Wall Street Journal continues to repeat the same allegations, without providing any concrete evidence to justify these claims.
"We question the timing of this new round of attacks, coming as it does just days after 1MDB announced it had successfully completed the share sale and purchase agreement for Edra Global Energy Berhad."
1MDB's transactions are under investigation in Switzerland, Singapore, Hong Kong and the US. Swiss authorities say 1MDB-related losses from misappropriation could reach US$4 billion.
The scandal has prompted several ongoing investigations by Malaysia’s central bank, a parliamentary committee, the country’s auditor general, Malaysia’s antigraft agency and police.
The country's attorney-general cleared Mr Najib of wrongdoing in January, saying that the US$681 million was a legal donation from Saudi’s royal family, and that most of it was returned.
Mr Najib’s defenders have said any money spent in Malaysia went for political purposes, which they say is permissible.
WSJ said on Wednesday that Malaysian investigation documents show the prime minister made more than 500 payments from his accounts, the bulk of them to political players.
Tens of millions of dollars of such payments occurred ahead of the May 2013 elections, which Mr Najib’s party risked losing for the first time since Malaysia’s independence from Britain in 1957, said the report.
The payments from the prime minister’s accounts at this time included nearly US$7 million to the private account of one of his four brothers Nazir, who is chairman of the government controlled CIMB Group Holdings, WSJ said.
Mr Nazir confirmed to the Journal in a written statement he received the money, which he said was disbursed by bank staff to ruling-party politicians according to the instructions of party leaders.
The banker, one of the most prominent critics of the running of 1MDB, said he believed the money originated with donations he had helped raise from Malaysian corporations and individuals for the elections.
“I had no knowledge whatsoever that these funds may have originated from any other source(s),” he said. “The entire amount was paid out in cash to various recipients according to the instructions of the party president and the account was closed with a zero balance.”
The WSJ report, citing the Malaysian investigation documents, said another transfer of almost US$70,000 went to the prime minister’s son, Mr Nor Ashman Najib, in 2014.
One of the most regular recipients of funds from Mr Najib’s accounts was Jakel Trading, a Malaysian retailer dealing in traditional Malay formal wear, suits, wedding attire and home furnishings. Between 2011 and 2014, Mr Najib transferred over US$14 million to Jakel, according to the investigation documents seen by WSJ.
There was a recorded expenditure on June 28, 2011, at Signature Exotic Cars, a car dealership in Kuala Lumpur, for US$56,000.
Mr Najib’s credit card also incurred charges of €750,000 (S$1.15 million) in August 2014 at an Italian branch of Swiss-owned jewellery store De Grisogono, reported WSJ. A person who works for De Grisogono confirmed to the newspaper that Datin Seri Rosmah Mansor, the prime minister’s wife, was a client of a branch of the jewellers.
She joined Mr Najib for his 2014 trip to Hawaii, where he played golf with vacationing US President Barack Obama. The Chanel store in Honolulu later charged US$130,625 to a Visa card in Mr Najib’s name, according to the Malaysian investigation documents.
None of the companies would comment or respond to queries.