Why It Matters

Najib's royal predicament

The rare statement on Tuesday by Malaysia's nine rulers, calling for swift and serious investigations into the murky affairs of beleaguered state investment firm 1Malaysia Development Berhad (1MDB), triggered responses across the spectrum.

Critics of Prime Minister Najib Razak called it a rebuke of the embattled leader, prompting his allies to deny that he had lost the support of the rulers, who remain influential despite being figureheads.

The most telling response was that of newly appointed Attorney-General Apandi Ali, who insisted that all probes were going full steam ahead, when for two months he has not contradicted the anti-graft agency's claim that a high-level task force looking into 1MDB had been disbanded.

The central bank, which is part of this on-off, on-again task force, then revealed that its investigations showed 1MDB had given incorrect information about US$1.83 billion (S$2.6 billion) in overseas investments, and ordered the firm - whose advisory chief is the embattled Prime Minister - to repatriate the sum. But the bank said it was up to the public prosecutor to bring charges against anyone.

1MDB, struggling under a mountain of debt, has so far resisted the central bank's order, and it remains to be seen how the authorities - who are obviously at odds with each other - will enforce the ruling.

The attorney-general was appointed three weeks after it was revealed that US$700 million allegedly linked to 1MDB had entered Datuk Seri Najib's personal accounts. The Malaysian Anti-Corruption Commission has said the funds were donations by unnamed supporters in the Middle East.

It is difficult to gauge what impact the rulers' statement would have on the ground, but it has clearly shaken those at the top, and resulted in more questions arising over 1MDB's transactions. The pressure on Mr Najib to resign grows, but it will take more than pronouncements from largely ceremonial royals to unseat the Prime Minister.

A version of this article appeared in the print edition of The Straits Times on October 12, 2015, with the headline 'Najib's royal predicament'. Print Edition | Subscribe