Malaysia to probe Melbourne property deal at centre of corruption claims

KUALA LUMPUR (Reuters) - Malaysia said on Wednesday it would investigate corruption allegations against government officials in a multimillion dollar property deal in Australia, the latest in a series of scandals plaguing Prime Minister Najib Razak's government.

Australia's Fairfax Media reported on Tuesday that Malaysian officials spent millions of dollars of government funds to buy an apartment block in Melbourne at an inflated cost, and allegedly received kickbacks for the transaction. "Regarding the allegations of corruption linking several individuals to a property purchase in Melbourne, the authorities here will thoroughly investigate those allegations, and if there are any wrongdoings and misappropriation, action will be taken," Datuk Seri Najib said on his Facebook page and Twitter account.

The Fairfax Media report said the officials had overpaid by A$4.75 million (S$4.9 million) for an apartment block, Dudley International House, bought in 2013 to house Malaysian students studying in Melbourne.

The alleged kickbacks went to Malaysian firms that had close links with a senior official at government agency MARA, the report said. MARA was originally set up to drive development and provide financial assistance to ethnic Malays.

Also involved was a senior Malaysian official and former politician with close links to a Malaysian Cabinet minister, the report said. It also named other Malaysian nationals.

MARA is conducting an internal audit and assisting an investigation by the Malaysian Anti-Corruption Commission, officials of the investment agency told reporters at a news conference on Wednesday.

The Australian government did not immediately respond to telephone calls and emails seeking comment.

Mr Najib's government has been roiled by corruption allegations surrounding Malaysian state-linked entities, including the debt-ridden investment fund 1Malaysia Development Berhad (1MDB).

His opponents, chief among them influential former prime minister Mahathir Mohamad, have repeatedly called for Najib to step down over 1MDB and other issues.

The country's auditor-general, a parliamentary panel, the central bank and police are investigating claims of corruption and mismanagement in 1MDB, as its debt of US$11.6 billion (S$15.6 billion) weighs on the country's sovereign ratings.

Malaysian opposition lawmakers have also queried a recent deal by state-linked Felda Global Ventures Holdings to buy a non-controlling stake in Indonesia's PT Eagle High Plantations for US$680 million.

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