Anti-graft watchdog Transparency International today joined mounting calls for Malaysia’s prime minister to launch an investigation into a state-owned investment vehicle hit by reports of murky deals and missing millions.
The company, 1Malaysia Development Bhd (1MDB), has quickly emerged as a major liability for premier Najib Razak, who championed its launch in 2009 and chairs its board of advisors.
1MDB is widely reported to be struggling to pay off more than USD 11 billion in debt, raising fears it could collapse and wreak havoc on Malaysia’s financial system.
Transparency International Malaysia called for a “full investigation into the numerous allegations of massive… financial and commercial crime” involving 1MDB, the anti-graft organisation said in a statement.
It made specific mention of a report this past weekend alleging USD 700 million were diverted from a shadowy 2009 deal between 1MDB and a little-known Saudi energy firm, PetroSaudi.
The expose by Sarawak Report, a UK-based activist site that focuses on Malaysian corruption allegations, said the money was sent to a company controlled by an associate of Najib’s family, a high-rolling Malaysian financier named Jho Taek Low.
It cited what it said were leaked emails in which some of those involved in the complex transaction state outright that PetroSaudi was to be used as a “front”.
AFP could not verify the authenticity of the emails.
Transparency said it feared an investigation “may uncover a plethora of larger issues such as corporate crime, embezzlement, corruption, misappropriation, mismanagement of funds, inappropriate decision-making and unethical behaviour, including and not limited to misuse of public office.”
Malaysia’s opposition has been demanding Najib and 1MDB clarify the fund’s dealings and whether money was syphoned off to benefit those close to the premier.
Former prime minister Mahathir Mohamad, still an influential power-broker in Najib’s ruling party, has also called for a full 1MDB audit.
A Najib spokesman declined comment on Transparency’s statement. His office has previously denied any wrongdoing by the prime minister.
Najib, who is also finance minister, said at the weekend that if any misdeeds are proven, the perpetrators would face justice, but he has so far not answered the growing clamour for an investigation.
His long-ruling government is routinely accused by critics of using its tight grip on power to dodge accountability on recurring scandals.