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Malaysia Freezes Hundreds of Bank Accounts, Questions Ex-Deputy PM in 1MDB Probe

Alfian Z.M. Tahir
Kuala Lumpur
2018-07-02
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Former Malaysian Deputy Prime Minister Ahmad Zahid Hamidi gestures after reporting to the Malaysian Anti-Corruption Commission (MACC) in Putrajaya over a 2015 meeting with Saudi royal family representatives, July 2, 2018.
Former Malaysian Deputy Prime Minister Ahmad Zahid Hamidi gestures after reporting to the Malaysian Anti-Corruption Commission (MACC) in Putrajaya over a 2015 meeting with Saudi royal family representatives, July 2, 2018.
Alfian ZM Tahir/BenarNews

Malaysia intensified its probe Monday into the alleged theft of billions of dollars from the state investment fund 1MDB, as authorities froze hundreds of bank accounts and questioned a former deputy prime minister for eight hours.

This happened as Malaysia’s new prime minister, Mahathir Mohamad witnessed the oath-taking of 13 more ministers in his cabinet, including the country’s new top diplomat. Mahathir’s Pakatan Harapan coalition had won the May 9 general election on a plank of cleaning up alleged corruption in government and getting to the bottom of the 1MDB scandal.

The ceremony before King Sultan Muhammad V at Istana Negara, the national palace, formally enlarged Mahathir’s cabinet to 27 members, including himself. Among notable names entering the cabinet were Foreign Minister Saifuddin Abdullah and Syed Saddiq Abdul Rahman, who was sworn in as youth and sports minister. Syed Saddiq, who is 25 years old, became the youngest-ever to be appointed to the nation’s cabinet.

But Mahathir said his lineup was still not complete.

“We will have (a total of) 29 ministers. We have 26 now, there are three more to go,” the state news service Bernama quoted him as saying.

Afterwards Saifuddin went to work at Wisma Putra, as the headquarters of the foreign ministry is known.

“As stated in our (Pakatan Harapan) manifesto, we aspire to sign all the international human rights conventions. There are nine conventions, of which we have only ratified three,” he told reporters later on Monday, according to Malaysia’s Star newspaper.

Accounts frozen

Meanwhile, Malaysia’s Anti-Corruption Commission (MACC), a task force probing allegations of corruption at 1MDB, said that 408 bank accounts involving almost U.S. $370 million had been frozen. The accounts were linked to 81 individuals and 55 companies, the agency said.

“The accounts were believed to be linked to the misappropriation and misuse of 1MDB funds,” MACC said in a statement Monday.

Authorities in the new government under Mahathir, who will turn 93 on July 10, reopened a probe into 1MDB soon after the Pakatan coalition defeated the Barisan Nasional bloc in a stunning electoral outcome buoyed by public anger over allegations of corruption at 1MDB.

On Monday, MACC questioned ex-Deputy Prime Minister Ahmad Zahid Hamidi over claims he made in 2015 that he had met representatives of the Saudi royal family who had channeled funds into Najib’s bank accounts.

“All the information they had were from media reports, so I was required to make a detailed account of what happened,” Zahid said, referring to MACC investigators.

Zahid, 65, appeared before the MACC two days after he was elected president of the United Malays National Organization (UMNO), the once-powerful ruling party that headed the Barisan coalition and was formerly led by Najib. Zahid told reporters on Sunday that he would leave it to the MACC to probe allegations that his party had received funds from 1MDB.

Najib stepped down from UMNO after the general election and chose Zahid to lead reform after the stunning election ended the party’s six decades in power. Investigators on Friday said the bank accounts they had frozen included those of UMNO.

The U.S. Department of Justice is trying to recover more than $1.7 billion in real estate and other assets allegedly siphoned off through complex transactions from 1MDB, which Najib formed in 2009 ostensibly to pursue development projects that would benefit Malaysian citizens.

Court documents allege that about U.S. $681 million of 1MDB funds were diverted into Najib’s personal bank accounts, but Najib said the money came as a political donation from a member of the Saudi royal family.

Zahid’s statement before the commission came a week after the anti-corruption agency summoned Amhari Efendi Nazaruddin, a former Najib aide, to have his statement recorded as part of the 1MDB probe. Najib and his wife, Rosmah Mansor, also gave their statements to the commission last month.

Zahid said he would return to MACC on Tuesday to answer more questions about alleged misappropriation of funds at a foundation belonging to his family.

And, a highly placed MACC source told BenarNews, that the commission would interview Najib’s 48-year-old stepson, Riza Aziz, on Tuesday.

Red Granite Pictures, a company co-founded by Riza, agreed in March this year to pay the U.S. government $60 million to settle a lawsuit that alleged its movies, including “The Wolf of Wall Street,” were made using funds stolen from 1MDB, according to court documents.

The settlement did not constitute an “admission of wrongdoing or liability on the part of Red Granite,” the court filing said.

Mahathir’s government is seeking to recover up to $4.5 billion that was allegedly siphoned off from 1MDB. Police last week said that jewelry, designer handbags, cash and other luxury goods seized, which had been seized in raids on residences linked to Najib, were worth up to U.S. $273 million.

Najib has denied allegations that he was involved in stealing the Malaysian people’s money from 1MDB.

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