Category: Financial Scandals

Lindsay Murdoch
Sydney Morning Herald
February 7, 2016

Bangkok: Mystery has deepened over the circumstances in which almost $US700 million ($990 million) was secretly deposited in the personal bank account of Malaysian Prime Minister Najib Razak.

The country’s attorney-general, Mohamad Apanda Ali, has declared the money was a donation from one of the nine sons of the late Saudi king Abdullah, but insists the motive is nobody else’s business.

“Why are people asking for the reason for the donation? You have to ask the donor. He has billions in his coffers … if he wanted to give the money, what’s the problem?” Mr Apandi told the Sin Chew Daily newspaper.

Saudi Arabian Foreign Minister Adel al-Jubeir says he does not think the money came from the Saudi government or that it was a political donation.

“It is a private Saudi citizen, I believe, and the funds went into an investment in Malaysia,” Mr Jubeir told The New York Times. Continue reading “Mystery of Najib Razak’s $990m donor deepens in Malaysia”

By: Simon Wilson
Money Week
06/02/2016

A state fund transferring a $681m donation to the PM’s account, dissenting ministers sacked and $4bn misappropriated – Malaysian democracy is under threat, says Simon Wilson.

What’s going on in Malaysia?

The government of Prime Minister Najib Razak has been rocked by a huge corruption scandal that gets more bizarre with every new twist, threatening to blow a hole in Malaysia’s credibility with international markets. At its heart is a state investment fund known as 1MDB, set up at Razak’s behest shortly after he came to power in 2009, and whose advisory board he chairs. Its purpose
was to borrow money so that it could attract foreign investment to stimulate Malaysia’s economy.

But according to The Wall Street Journal, which has been at the forefront of investigating and reporting the scandal, while 1MDB was good at borrowing money, it has been less adept at actually investing it. In early 2015, it defaulted on payments on the roughly $11bn it had raised from international investors, setting off alarm bells and sparking investigations into the fund. Continue reading “Malaysia’s curious corruption case”

By AUSTIN RAMZY
New York Times
FEB. 5, 2016

KUALA LUMPUR, Malaysia — After Malaysia’s attorney general cleared Prime Minister Najib Razak of corruption charges involving hundreds of millions of dollars that ended up in his bank accounts, Mr. Najib issued a statement of his own.

“The matter has been comprehensively put to rest,” he said last week. “It is time for us to unite and move on.”

That has not happened.

Instead of answering the questions about the money and its possible links to a heavily indebted Malaysian sovereign wealth fund, the attorney general’s announcement has only sharpened them. Continue reading “No End to Scrutiny Over Millions Sent to Malaysian Leader’s Accounts”

Geraldine Amiel and Pooi Koon Chong
Bloomberg
February 5, 2016

French financial prosecutors said they have started a formal probe into whether bribes were paid by Thales SA officials to secure the sale in 2002 of two submarines to Malaysia for more than $1.2 billion.

Prosecutors placed former Thales International Asia President Bernard Baiocco under investigation for “active corruption of foreign governmental officials” and are seeking to determine if “kickbacks” were used to win the contract, a spokesman for the French national prosecutor’s office said Friday, asking to remain anonymous in line with office policy.

Malaysian Prime Minister Najib Razak, who was defense minister in 2002, is a suspect in the case, a French official said, asking not to be named because of the sensitivity of the investigation. The Financial Times reported earlier that Najib is suspected of receiving one of the bribes, along with his associate Abdul Razak Baginda.

Najib’s office said the allegations were “baseless smears for political gain.”
Continue reading “France Probes Possible Bribes in 2002 Malaysia Submarine Sale”

Andrea Tan and Pooi Koon Chong
Bloomberg
February 5, 2016

Bank accounts frozen. Bankers quizzed. As offshore authorities seek to track money flows involving Malaysia’s troubled government investment fund, fresh questions are rising about doing business in the country.

Crisscrossing countries from Switzerland to the U.S., Middle East and Singapore, investigators are chasing a trail of transactions linked to 1Malaysia Development Bhd. With the probes potentially running for years, investors and analysts say it may damage the perception that Malaysia is trying to become a more transparent place.

The risk is political, economic and commercial. Debt-ridden 1MDB, which is in the process of being broken up, was touted as the vehicle for the government to spur growth, investing mainly in property and power generation. Prime Minister Najib Razak — who has faced a separate furor over a $681 million personal donation from the Saudi royal family — sits on its advisory board.

The premier was cleared of any graft, and $620 million of the funds were returned. He and 1MDB have consistently denied any wrongdoing.

“The scandal has thrown Malaysia’s governance failings – both political and economic – into sharp relief,” said Nicholas Spiro, a partner at London-based Lauressa Advisory Ltd. “The 1MDB scandal raises the stakes significantly.” Continue reading “Malaysia’s Anti-Graft Efforts Haven’t Put Investors at Ease”

Iain Marlow
The Globe and Mail
Feb. 04, 2016

Singaporean authorities this week seized a number of bank accounts linked to Malaysia’s beleaguered state investment fund, 1Malaysia Development Bhd., as part of an ongoing international investigation into alleged corruption that has ensnared Malaysian Prime Minister Najib Razak.

The move is the latest twist in a global investigation centred on an unusual payment of $681-million (U.S.) from accounts and companies linked to 1MDB into the private accounts of Mr. Najib, who founded and chairs 1MDB. As the investigations continue, Malaysia’s government has undertaken a widespread crackdown on dissidents and dismissed critical politicians – outraging human-rights groups. The eventual conclusion of a domestic investigation by the country’s Attorney-General – that the cash was a donation from Saudi Arabia’s royal family, and has since mostly been returned – has not stopped other investigations by U.S. and Swiss authorities. Continue reading “What the 1MDB scandal means for democracy in Malaysia”

Those who still believe in the Prime Minister Datuk Seri Najib Razak and suffer from the illusion spread by Najib in his 2016 New Year Message that the Prime Minister’s twin world-class RM2.6 “political donation” and the RM55 billion 1MDB mega scandals have been resolved and are no more issues need only to refer today’s news portals, both locally and internationally, to realise how wrong they are.

It is supreme irony that Najib’s very own Ministers are among those in the forefront debunking the Prime Minister’s delusion that his twin mega scandals are no more issues as they had been resolved.

The Minister in the Prime Minister’s Department, Datuk Seri Abdul Wahid Omar said that 1MDB was the exception in the anti-graft movement among Malaysian companies, claiming that most other Malaysian companies have made good progress in improving transparency.

Goodness me, do we have to wait until 1MDB scandal become the norm for all GLCs in Malaysia which will see the country competing with Somali, North Korea, Afghanistan and Sudan for the last four spots on Transparency International’s annual Corruption Perception Index? Continue reading “Do we have to wait until 1MDB scandal become the norm in Malaysia which will see the country competing with Somali, North Korea, Afghanistan and Sudan for the last four spots on the TI CPI?”

by Greg Earl
Australian Financial Review
Feb 3 2016

There was a time when a Malaysian leader only had to slug it out in the opaque but tough forum of the United Malays National Organisation (UMNO) to remain in power.

And tough it certainly has been, with a leader or rising deputy ruthlessly shoved aside usually amid outbreaks of Malay chauvinism about once a decade during the almost 60 years UMNO has been in power.

Prime Minister Najib Razak produced a masterful performance at the party conference late last year drawing on Malay feudal notions of loyalty and more modernist Islamic principles to fend off a corruption scandal, a weak economy and criticism by his deputy.

Last week the Attorney-General Apandi Ali seemed to take his cue from the conference and declare that there was nothing more to investigate about one of the world’s most amazing political funding sagas in which the Saudi royal family put US$680 million in Najib’s private bank accounts in the run-up to the 2013 election. And after a budget adjustment to cope with the emerging market uncertainty, the attorney-general appeared to clear the way for the prime minister to celebrate his 40 years in politics. Continue reading “The world is closing in on Malaysia’s insular ruling elite”

By WILLIAM PESEK
Barron’s Asia
February 3, 2016

While Swiss and Singapore officials turn up the heat, Prime Minister Najib Razak hides his head in the sand.

I don’t know who Najib Razak’s friends are in Saudi Arabia, but I sure want a few.

Who wouldn’t covet a pal or two willing to toss you $700 million as a “gift,” no strings attached? That’s at least the Malaysian prime minister’s story, and he’s sticking to it. Politicians overseas, meanwhile, would sure love to have Najib’s electorate. Since the Wall Street Journal broke news of his good fortune, Najib has displayed a fatalistic willingness to take an entire economy down so he can stay in office. And his party harbors little fear of losing power.

There’s the “Twilight Zone” and there’s the “Malaysia Zone,” and just try discerning the difference. Najib-gate grew even more surreal last week when Malaysia’s attorney general suddenly cleared him of criminal or corruption charges. In a hastily-arranged press conference, Mohamed Apandi Ali said Najib had returned all but $61 million of that “donation” from the Saudi royal family. Somehow, Apandi kept a straight face as he declared the matter closed. Continue reading “Malaysia’s 1MDB Scandal: You Couldn’t Make It Up”

By Una Galani
Reuters Breakingviews
February 1, 2016

It’s hard to bury a big scandal. That is the awkward lesson that Najib Razak is learning. The Malaysian prime minister is attempting to draw a line under a multi-pronged financial controversy that almost toppled him. But initial findings from Switzerland’s attorney general that around $4 billion may have been misappropriated from Malaysian state firms is a sharp reminder of the lingering threat posed by foreign investigations.

Even by the standards of Malaysian politics, it has been an extraordinary few days. On Jan. 26, the country’s chief prosecutor concluded that $681 million that was transferred into the Prime Minister’s personal account in 2013 was a donation from the royal family in Saudi Arabia, not money from 1Malaysia Development Berhad, an indebted fund he championed. Najib was cleared of graft. Three days later, however, Swiss authorities published preliminary conclusions from its own probe into 1MDB which found that billions may have been squirreled away between 2009 and 2013. Continue reading “Swiss 1MDB probe holds fat tail risks for Malaysia”

Jeevan Vasagar and Michael Peel
Financial Times
February 2, 2016

Malaysia’s government has been battered by international allegations of corruption on a grand scale — yet at home prime minister Najib Razak appears as secure as ever.

While Kuala Lumpur is under pressure from global regulators, with both Switzerland and Singapore shining a light on alleged misconduct, the prime minister’s tightened grip on power has raised concern about growing authoritarianism.

Over the past six months, as controversy raged over $680m transfers into his bank account, Mr Najib has replaced the country’s attorney-general and sacked a critical deputy prime minister. Meanwhile, his administration has imposed travel bans on opponents and rushed through legislation Malaysia’s bar council describes as a “lurch towards an authoritarian government”. Continue reading “Malaysia stifles dissent as public unrest grows”

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. Continue reading “Foreign governments pile pressure on Malaysia over financial scandals”

Observer editorial
Sunday 31 January 2016

There is, rightly, widespread concern over Najib and a democratic deficit

Dato’ Sri Mohamed Najib bin Tun Abdul Razak was born to rule. Son of Malaysia’s second post-independence prime minister and nephew of its third, he entered parliament at the age of 23, inheriting his father’s seat and was handed several senior portfolios before being appointed prime minister himself in 2009.

Najib heads the powerful United Malays National Organisation (Umno), the pre-eminent political force. His national and personal dominance symbolises the bumiputera (ethnic Malay) ascendancy in a country with large, constitutionally disadvantaged ethnic Indian and Chinese minorities.

But as the intense firestorm sparked by last week’s arbitrary dismissal of potentially career-ending corruption allegations against him suggests, Najib is also seen by growing numbers of fellow citizens as unfit to rule the country whose leadership he inherited as if by right. His time in government, especially since the 2013 general election, has brought an expansion of repressive laws, multiplying human rights abuses and curbs on media freedoms more reminiscent of Russia than of a supposedly functional, pro-western democracy closely allied to Britain and the US. Continue reading “The Observer view on corruption in Malaysia”