ENLARGE
Malaysian Prime Minister Najib Razak speaking at the prime minister's office in Putrajaya, outside Kuala Lumpur, on Feb. 6. PHOTO: AGENCE FRANCE-PRESSE/GETTY IMAGES
By [size=1.4]TOM WRIGHT
Updated July 3, 2015 3:21 a.m. ET0 COMMENTS
Malaysia’s anticorruption agency will look into a report in The Wall Street Journal thatMalaysian investigators have traced nearly $700 million of deposits into what they believe are the personal bank accounts of Malaysia’s prime minister, Najib Razak.
“We will look into the matter,” said Rohaizad Yaakob, a spokesman for the Malaysian Anti-Corruption Commission. “If there’s any corruption at all, we will investigate.”
The Malaysian ringgit fell to a fresh 10-year low against the U.S. dollar Friday after the report in the Journal, traders said.
The Malaysian government investigation, detailed in the Journal report, marks the first time Mr. Najib has been directly connected to probes into state investment fund 1Malaysia Development Bhd.
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The 1MDB fund, which Mr. Najib set up in 2009, has been at the center of a political storm in Malaysia for months after amassing over $11 billion in debt that it is struggling to repay. The government investigation reported by the Journal lays out what investigators believe to be the movement of cash among government agencies, banks and companies linked to 1MDB before it ended up in Mr. Najib’s personal accounts.
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In a statement Friday in response to the Journal story, Mr. Najib’s office said “there have been concerted efforts by certain individuals to undermine confidence in our economy, tarnish the government and remove a democratically-elected prime minister.”
The statement called the Journal report a “continuation of this political sabotage.”
1MDB, in its own statement Friday, said the “existence and authenticity” of the government probe documents “have not been publicly verified.” The fund said the documents were being used as a “basis to create new unsubstantiated allegations against 1MDB.”
On Thursday, a spokesman for 1MDB told the Journal it wasn’t aware of any transactions into Mr. Najib’s account or any documents to that effect. It noted that doctored documents have been used in the past to discredit 1MDB and the government.
A Malaysian government spokesman, quoted in the Journal story, said, “The prime minister has not taken any funds for personal use” and added the allegations against him are politically motivated.
The ringgit fell to 3.7840 to the dollar. Global investors, who own about half of Malaysian government bonds, are increasingly worried the government might have to cover 1MDB’s debt. The fund at times has had to reschedule debt repayments. Investors in recent months have sold off short-term Malaysian government bonds.
News of the government probe into 1MDB and the transfers to Mr. Najib’s personal accounts “keeps people cautious,” said Ashley Perrot, head of pan-Asia fixed income at UBS Global Asset Management. “The ringgit today is very much the weakest currency in Asia.”
Opposition politicians on Friday called for Mr. Najib to step down to allow for an independent investigation. “We call on the PM to step aside—to take leave immediately—to allow an independent investigation,” said Tian Chua, vice president of the opposition People’s Justice Party.
“The cabinet must hold an emergency meeting to discuss this latest development,” Tony Pua, a parliamentarian with the opposition Democratic Action Party, was quoted as saying in local media. “They must insist that the PM take leave from his position until the matter can be fully investigated.”
—Celine Fernandez and Anjani Trivedi contributed to this article.
Post time 3-7-2015 03:55 PM
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