KUALA LUMPUR (REUTERS, THE STAR/ASIA NEWS NETWORK) – Malaysian police raided the office of troubled state investment fund 1Malaysia Development Bhd (1MDB) on Wednesday, following a report that claimed investigators looking into the firm found nearly US$700 million had been transferred to Prime Minister Najib Razak’s bank account.
Najib has denied taking any money and said the corruption allegations are part of a malicious campaign to force him out of office.
The Wall Street Journal (WSJ) reported last week that investigators probing 1MDB had traced funds flowing into Najib’s personal account when he was campaigning for a general election over two years ago.
“We can confirm that a number of officials from the task force, conducting an enquiry into 1MDB, visited our offices today,” 1MDB said in a statement. “They were provided with a number of documents and materials to aid with the investigations currently taking place.”
A few plainclothes officers, believed to be from the police, were seen leaving the Menara IMC building in the heart of Kuala Lumpur’s business district at 6.20pm with a CPU and a box believed to contain documents and materials taken from 1MDB's office.
1MDB chief executive officer Arul Kanda Kandasamy said the raid and investigation had been carried out in a thorough and professional manner. “The task force comprising officers from the police and MACC arrived this morning at 9.40am. We have been extending full cooperation to the task force."
The Inspector-General of Police (IGP) Khalid Abu Bakar told reporters on Wednesday morning that the police were investigating how the Wall Street Journal (WSJ) obtained access to bank documents which it uploaded on its website on Tuesday.
Sources told The Star that a team from Commercial Crime Investigations Department (CCID) was involved in the raid. They said that the raid was to search for documents related to certain deals linked to 1MDB funds. They declined to say if the raid was also part of police efforts to determine how classified documents were leaked to the WSJ.
1MDB, a property-to-energy group whose advisory board is chaired by Najib, has debts of around US$11 billion.
Even before the WSJ report it was the subject of separate investigations by the central bank, auditor general, police and the parliament’s Public Accounts Committee. The WSJ report, citing documents from a government investigation, said there were five deposits into Najib’s account.
The two largest transactions, worth US$620 million and US$61 million, were made in March 2013 during the election campaign, the paper said. It said they came from a company registered in the British Virgin Islands via the Singapore branch of Falcon Private Bank. Reuters has not independently verified the WSJ report.
Singapore’s central bank said on Wednesday that it would provide assistance to Malaysia and share information where it was legally able to. Falcon Private Bank, a Swiss private bank owned by Abu Dhabi sovereign wealth fund International Petroleum Investment Company, said it was already in contact with the Monetary Authority of Singapore and would be fully transparent with the authorities.
On Tuesday, the Journal released what it said were government documents from the probe of the prime minister, detailing a money trail that it said led to his personal bank account.
The Attorney-General Abdul Gani Patail, who is part of a special task force probing 1MDB, said the documents were already the subject matter of an investigation. A task force investigating 1MDB said it had frozen half a dozen bank accounts this week in relation to the allegations. But Abdul Gani said that the freeze order did not involve any bank accounts allegedly held by Najib.
The furore surrounding 1MDB and the ensuing political crisis have spooked financial markets.
The ringgit is trading at a 16-year low against the dollar and has weakened past the old currency peg of 3.80 per dollar, fixed in September 1998 during the Asian financial crisis and scrapped in 2005. The benchmark stock index dropped to its lowest in a week.
In a statement on his website after the raids, Najib said that he has instructed his lawyers to send a letter to the Journal.
“Accusations by the Wall Street Journal are malicious and supported by certain quarters in the country with the purpose of forcing me to quit as prime minister and president of Umno,”said Najib, referring to his party, the United Malays National Organisation.
Najib’s law firm, Hafarizam Wan & Aisha Mubarak said in a statement it had been instructed to consider action against the Journal. A spokeswoman for Dow Jones & Co, which publishes the WSJ, said: “We stand behind our fair and accurate coverage of this evolving story.”
Opposition lawmakers have pressed cabinet ministers for a full explanation into the allegations, and asked him to go on leave until a probe is completed.
Members of Najib’s Umno party have closed ranks behind the prime minister, who had already been on the back foot over alleged mismanagement of 1MDB and his handling of the economy.
“I think the cabinet was very united in that we have to allow for due process to take its course,” Khairy Jamaluddin, the youth and sports minister, told reporters after a cabinet meeting in Malaysia’s administrative capital Putrajaya. 1MDB has described the allegations as “unsubstantiated”, saying it never provided funds to the prime minister.
NO LINK TO MURDER CASE
Meanwhile, the police chief, also said there was no connection between the 2013 murder of AmBank founder Hussain Ahmad Najadi and the money trail allegations against Najib. The Sarawak Report had in its latest posting interviewed Hussain's son, Pascal, who is now in Moscow. He claimed that his father died for reporting about alleged bank corruption.
Khalid said such claims were false and bordered on malice. "I can confirm that Hussain did not make any police report before he was shot dead," he told reporters on Wednesday. "Hussain's case has been solved with the killer already detained. End of story," he said.
A tow truck driver was sentenced to death last year by a High Court for murdering Hussain in July 2013.