Malaysia’s 1MDB Faces New Probe Over Money Transfers: Newspaper

1Malaysia Development Berhad (1MDB) is facing new scrutiny from The Wall Street Journal over three letters in a name and offshore transactions totaling U.S. $850 million.

1MDB is an indebted state investment fund linked to an alleged corruption scandal that has mired Malaysian Prime Minister Najib Razak since early July. The Journal was the newspaper that broke the story, in which it reported that U.S. $700 million from 1MDB was deposited into private bank accounts belonging to Najib.

In Thursday’s report, the Journal reported that 1MDB transferred the U.S. $850 million to a company registered in the British Virgin Islands, Aabar Investments PJS Ltd., through three transactions. The Virgin Islands company incorporated in March 2012 and liquidated last June, according to the report.

Investigations in six nations include a focus on U.S. $2.4 billion in payments to a unit of Abu Dhabi’s International Petroleum Investment Co. (IPIC) as part of a deal to purchase power plants in Malaysia and elsewhere, the Journal reported. IPIC’s subsidiary is Aabar Investments PJS, according to the Journal. IPIC and Aabar executives concluded that they never owned or controlled the Virgin Islands company with the similar name.

1MDB is being investigated in Singapore, Switzerland, Hong Kong and the United States along with Malaysia and Abu Dhabi, the U.S.-based Journal said.

Prime Minister Najib established 1MDB in 2009 to promote economic development. In July, the Journal reported that hundreds of millions of dollars from the state fund were deposited into the prime minister’s private accounts ahead of the May 2013 general election, leading to an investigation by the U.S. Federal Bureau of Investigation.

Since the story broke, Najib has repeatedly denied wrongdoing and maintained that the money was donated to him. He has acknowledged that the large sum of money was deposited into his bank via government entities linked to 1MDB.

Najib remains defiant, telling the annual meeting of his United National Malays Organization (UMNO) party earlier this month “No retreat! No surrender!” over calls that he step down because of the scandal.

Following Najib’s most recent denial, Deputy Prime Minister Zahid Hamidi said the money came from the leader of a foreign country, but did not divulge the country or the purpose of the donation.

State fund rejects report

1MDB issued a scathing news release against the latest report, calling it based on “old and recycled allegations which were first published by an online blog, now known to be working hand-in-glove with certain political interests in Malaysia.”

The news release also touted 1MDB’s continuing strong business relationship with the Abu Dhabi company.

“IPIC has since reaffirmed its commitment to working with 1MDB via a public statement issued in October,” 1MDB said.

1MDB is asking that others wait for the investigations to finish. Najib, who serves on 1MDB’s board, has not commented on the latest report by the Journal.

“Rather than engage in mud-slinging attacks against 1MDB, we ask those elements within the media and the opposition who are seemingly intent on derailing this process to await the results of the investigations currently being conducted by various independent lawful authorities, to whom 1MDB is extending its full cooperation,” 1MDB added.