Mahathir urges US not to give 1MDB funds back to KL

KUALA LUMPUR • The United States should "think twice" before giving Malaysia back the money recovered from an anti-kleptocracy probe into 1Malaysia Development Berhad (1MDB), former prime minister Mahathir Mohamad said yesterday, as the party accused of graft at the state fund is now back in power.

Tun Dr Mahathir, 94, abruptly resigned last month before being replaced by Tan Sri Muhyiddin Yassin, whose coalition includes former ruling party Umno, despite voters rejecting Umno in the 2018 general election amid a backlash over the multibillion-dollar scandal at state fund 1MDB.

The US Department of Justice (DOJ) says more than US$4.5 billion (S$6.3 billion) was looted from 1MDB under then Umno chief Najib Razak, the former premier who is now on trial for allegedly receiving some of the stolen money.

The DOJ, in its biggest anti-kleptocracy case, has recouped about US$1 billion from the seizure and sale of assets allegedly bought with 1MDB funds.

The DOJ returned nearly US$200 million to Malaysia last May, but a second transfer of about US$240 million was delayed last month amid uncertainty following Dr Mahathir's resignation, sources have said.

Dr Mahathir told Reuters that the DOJ should reconsider its decision to send the money to Malaysia after the return of Najib's party to the government.

"When we took over, the DOJ was willing to give it to us because we overthrew the people who stole the money," he said in an interview.

"Now, the people who stole the money are going to get back the money they stole. I think the DOJ will have to think twice."

At least six countries are investigating alleged graft and money laundering at 1MDB, founded by Najib in 2009. After a surprise election victory in 2018, Dr Mahathir reopened probes into 1MDB and Najib's involvement at the fund.

Najib is facing five trials, the first of which - involving seven charges linked to US$10 million misappropriated from a 1MDB unit - is expected to reach a verdict within months.

He has pleaded not guilty and says he was misled by Malaysian financier Low Taek Jho, also known as Jho Low, and other 1MDB officials. Najib told Reuters last week that he expected an atmosphere more conducive to a fair hearing now that Dr Mahathir was out of power.

The case has also led to scrutiny of Goldman Sachs, which Malaysia has accused of misleading investors over bond sales totalling US$6.5 billion that it helped raise for 1MDB. Three units of the bank have pleaded not guilty.

REUTERS

A version of this article appeared in the print edition of The Straits Times on March 14, 2020, with the headline 'Mahathir urges US not to give 1MDB funds back to KL'. Subscribe