KUALA LUMPUR • The US Department of Justice has delayed the return to Malaysia of a further US$240 million (S$332 million) of recovered money allegedly stolen from the 1MDB sovereign fund, two sources with direct knowledge of the matter said yesterday, with one citing political uncertainty as a reason for the delay.
Malaysia was plunged into turmoil when 94-year-old prime minister Mahathir Mohamad quit on Feb 24, after the collapse of his Pakatan Harapan coalition.
He was replaced last Sunday by Tan Sri Muhyiddin Yassin, whose new Perikatan Nasional alliance includes the former ruling party that was voted out in 2018 amid accusations of corruption over 1Malaysia Development Berhad (1MDB).
The US Department of Justice (DOJ) says more than US$4.5 billion was looted from the fund under then Prime Minister Najib Razak, who is now on trial for corruption.
Since 2016, the department has filed civil lawsuits seeking to seize about US$1.7 billion in assets allegedly bought with stolen 1MDB funds.
Last May, the United States began returning some of the recovered funds. The first instalment was nearly US$200 million.
The DOJ had initially been scheduled to return the next payment of recovered funds to Malaysia on Feb 19, but there were technical reasons the transfer did not happen, the two sources said.
The total amount was around RM1 billion (S$335 million), one source said.
But once Tun Dr Mahathir resigned, it was decided to hold the payment because of uncertainty over what would happen next, said one of the sources, who did not want to be identified as they were not authorised to speak to the media. A DOJ spokesman declined to comment.
Malaysia's Finance Ministry redirected questions to the Attorney-General's Chambers, which did not immediately respond to a Reuters request for comment.
The sources said they were not aware of the DOJ's next steps.
The funds returned go into a special fund at Malaysia's Finance Ministry and are meant to be used to pay 1MDB's bond holders.
American and Malaysian investigators have said Najib received about US$1 billion of the stolen funds. He has pleaded not guilty and says he was misled by Malaysian financier Jho Low and other 1MDB officials.
It was only after Najib's unexpected defeat in the 2018 general election that the 1MDB investigation was reopened in Malaysia and trials began.
Goldman Sachs and some of its executives are among the many charged for their role as underwriter and arranger of three bond sales that raised US$6.5 billion for 1MDB. Three units of Goldman have pleaded not guilty to charges.
Najib told Reuters this week that he expected an atmosphere more conducive to a fair hearing now that Dr Mahathir has gone.
Mr Muhyiddin has not talked about the 1MDB cases, but has vowed to fight graft.
Two senior officials in the Mahathir administration fighting graft - the attorney-general and the chief of the anti-corruption commission - have quit in the past week after Dr Mahathir's resignation.
REUTERS
