By YANTOULTRA NGUI
Wall Street Journal
July 26, 2016

Government won’t protect citizens, senior government official says

KUALA LUMPUR, Malaysia—The Malaysian government won’t protect citizens from legal action taken outside the country stemming from the scandal surrounding state investment fund 1Malaysia Development Bhd., a senior government official said Tuesday.

Johari Abdul Ghani, who is second in command in the Finance Ministry under Prime Minister Najib Razak, who is also finance minister, said that the 1MDB scandal served as a “very expensive lesson’’ for the Southeast Asian country.

“As far as the government of Malaysia is concerned, any individuals that basically have committed any offense in any countries outside Malaysia, the Malaysian government will not protect them,” Mr. Johari told reporters. “We want them to face the due legal process. That is the commitment of the government.”

Mr. Johari was speaking a week after the U.S. Justice Department filed a civil lawsuit seeking to seize assets that it said were bought with $3.5 billion misappropriated from the fund. 1MDB was set up by Mr. Najib in 2009 to promote economic growth. The Finance Ministry wholly owns 1MDB.

The Justice Department’s civil lawsuit named Riza Aziz, Mr. Najib’s stepson, as a “relevant individual,”along with Malaysian financier, Jho Low.

Mr. Riza wasn’t immediately available for comment. Red Granite Pictures, a film company partly owned by Mr. Riza, said it is cooperating fully with all inquiries and that it and Mr. Riza “did nothing wrong.”

A representative for Mr. Low declined to comment, but he has previously denied wrongdoing.

Among the Justice Department’s assertions were that some $1 billion originating with 1MDB was plowed into hotels; luxury real estate in Manhattan, Beverly Hills and London; fine art; a private jet; and the 2013 film “The Wolf of Wall Street.”

The lawsuit doesn’t name Mr. Najib, but there are 32 references in the complaint to “Malaysian Official 1,” who allegedly received hundreds of millions of dollars in funds siphoned from 1MDB.

A person with direct knowledge of the investigation said that “Malaysian Official 1” is Mr. Najib. Descriptions of the official in the filings include information about Mr. Najib’s position at 1MDB along with other identifying details.

Mr. Najib has been at the center of the scandal surrounding 1MDB since The Wall Street Journal reported more than a year ago that hundreds of millions of dollars that originated with 1MDB flowed into his personal bank account. Mr. Najib has said he did nothing wrong and that any suggestions of wrongdoing were political smears. The Malaysian attorney general has said the funds that went into Mr. Najib’s account were a legal political donation from Saudi Arabia and cleared him of wrongdoing, and said most of the money was returned.

Mr. Najib’s press secretary noted the civil lawsuits filed by the Justice Department and said the Malaysian government would fully cooperate with any lawful investigation. 1MDB denies wrongdoing and also said it would cooperate with any lawful investigation.

Mr. Najib has fought off efforts to oust him from his office by rallying members of his party, which has run Malaysia since its founding, and pushing out officials who opposed him.

In Singapore, authorities said last week that they had frozen bank accounts holding $184 million, $88 million of which the authorities said belongs to Mr. Low and his family.

Singapore authorities also said they had found “control failings” and breaches of money-laundering regulations at several financial institutions in the city-state as part of a wide-raging investigation into alleged misappropriation of funds from 1MDB.