The Malaysian Insider
2 February 2016

Malaysia may have absolved its prime minister in a huge corruption scandal, but foreign authorities investigating suspicious global fund flows are making clear the affair is far from over and that the net may be tightening.

Attorney-General Tan Sri Mohamed Apandi Ali last week cleared Datuk Seri Najib Razak of wrongdoing in accepting a mysterious US$681 million payment (RM2.6 billion) from overseas, sparking accusations of a cover-up in a case that has shaken Najib’s government to its core.

But within days, authorities in Switzerland and Singapore upped the pressure, pointedly responding that investigations into an array of Malaysian money movements were forging ahead and releasing new information.

The Swiss attorney-general’s office on Saturday revealed that it believed US$4 billion had been pilfered from Malaysian state companies, and on Monday Singapore announced it had seized a “large number of bank accounts” as part of investigations into a company closely linked to Najib, 1Malaysia Development Berhad (1MDB).

Observers said the timing and tone of the Swiss and Singaporean statements appeared to indicate concern that Malaysia may seek to bury the issue.

“The Swiss and Singaporeans are obviously worried that (clearing Najib) looks detrimental to their ongoing investigations,” said Cynthia Gabriel, head of C4, a Malaysian anti-graft NGO.

“But this is definitely far from over and looks like the noose is tightening on Najib,” she added, referring to the new details announced by the Swiss and Singaporeans.

Malaysia has been rocked for more than a year by allegations that huge sums of money were diverted from 1MDB, an investment company, and the revelation last July of the US$681 million payment to Najib.

While he is not yet known to be directly implicated in any overseas investigation, Najib launched 1MDB and still chairs its advisory board.

He and 1MDB strongly deny the widely-held public suspicion that the US$681 million came from the now debt-strapped investment company.

Apandi last week called the payment a legal “personal donation” from the Saudi royal family. The explanation has been ridiculed in Malaysia as an implausible cover story.

Since last year, Najib’s government has arrested whistleblowers and moved to muzzle media outlets who reported on the scandals, including shutting down one newspaper for three months.

He also purged his leadership of critics and sacked a previous attorney-general who was investigating.

That has left the threat of foreign action – authorities in the United States and Hong Kong also said to be investigating – as Najib’s primary concern.

Last week, Apandi declared there was no need for Malaysia to cooperate with foreign authorities on Najib’s “donation”.

John Malott, a former US ambassador to Malaysia, called that a “very unfortunate statement” that likely caused anger overseas.

“Basically he was telling the rest of the world to drop dead, and the Swiss and Singaporeans have replied that ‘maybe you think its the end, but we don’t’. The timing of their responses was just too close,” he said.

Malott said Najib now “must really be sweating” over whether US authorities – reported by US media to be investigating – will make an announcement, which they usually withhold until a solid case is built.

However, the recent Swiss and Singaporean announcements are already seen as raising the pressure.

Switzerland had announced last year that “tens of millions of dollars” in suspicious assets had been frozen, and that it had opened criminal proceedings against two former 1MDB officials and “persons unknown” suspected of bribery, money-laundering and other crimes.

On Saturday, the Swiss attorney-general’s office revealed that up to US$4 billion may have been stolen from Malaysian state firms, with a “small portion” transferred into Swiss accounts held by current and former Malaysian and United Arab Emirates officials.

Requesting Kuala Lumpur’s help, it added that the Malaysian companies concerned have oddly made no comment on their alleged massive losses.

Apandi pledged Saturday to cooperate.

Singapore said Monday it was “actively” probing allegations of money-laundering related to 1MDB and was communicating with Malaysian, Swiss and US officials.

A joint statement by the Monetary Authority of Singapore and police said, “Singapore does not tolerate the use of its financial system as a refuge or conduit for illicit funds”. – AFP, February 2, 2016.