KUALA LUMPUR - Malaysia's former prime minister Dr Mahathir Mohamad on Sunday accused Putrajaya of a cover-up, after it was revealed that state fund 1Malaysia Development Bhd's (1MDB) US$1.103-billion (S$1.47 billion) investment redemption was in assets and not cash.
In a blog post, Dr Mahathir said the Finance Ministry's confirmation that the amount was in assets directly contradicted Prime Minister Najib Razak's parliamentary reply that 1MDB's funds were brought back from the Cayman Islands and parked in Singapore's BSI Bank, Malay Mail Online reported on Sunday.
The website also quoted Dr Mahathir as saying that Bank Negara Malaysia would have been informed by Singapore authorities of the fact that the amount was not in the form of US dollars as had been asserted.
"The 'cover-up' act or the act of hiding offences committed in government transactions is legally wrong," Dr Mahathir wrote in the blog post.
He cited Section 218 of the Penal Code which imposes a punishment of a maximum jail term of three years or a fine, or both. for public servants who prepare records that they know to be incorrect, knowing that doing so will cause losses to the public or they do so with the intent to escape legal punishment.
"There is a criminal element in this case that requires a police investigation and if this money cannot be traced, then legal action must be taken against all the parties involved," Malay Mail quoted Dr Mahathir as saying.
Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said on Thursday that 1MDB's funds, now parked in Singapore's BSI Bank, is in the form of units and not US dollars as previously claimed by 1MDB CEO Arul Kanda Kandasamy.
1MDB has been at the centre of controversial allegations that it was a front for individuals close to Mr Najib to siphon off public funds. Its recent land sales to statutory funds have been criticised even by leaders of the Umno ruling party - including Dr Mahathir who has called for Mr Najib to resign.
The fund is currently being probed by the Auditor-General and Parliament's bipartisan Public Accounts Committee.