ZCZC
BCN-19
MALAYSIA-CHINA-INVESTMENTS-CORRUPTION
Malaysia draws China link to huge financial scandal
KUALA LUMPUR, June 6, 2018 (BSS/AFP) – Malaysia’s ousted leader has denied
wrongdoing over a $2.4 billion China-backed pipeline deal after the new
government said the project was “highly suspicious” and linked it to a
massive financial scandal.
A company owned by Malaysia’s finance ministry signed the 9.4-billion
ringgit deal in 2016 for a Chinese state-owned company to build a gas
pipeline and an oil pipeline.
Najib Razak — toppled in elections last month — was prime minister at
the time, and battling allegations billions of dollars were looted from
sovereign wealth fund 1MDB.
The pipeline deal was one of a series of big-ticket, Beijing-backed
projects signed during Najib’s leadership, fuelling suspicions China was
helping the scandal-mired leader pay off debts racked up by the stricken
fund.
Malaysia’s Finance Minister Lim Guan Eng said Tuesday that 8.25 billion
ringgit had already been drawn down by the Chinese company building the
pipelines.
This amounted to almost 88 percent of the project value — yet only 13
percent of the work had been completed, he said in a statement.
Lim said he had instructed officials to file a report about the “highly
suspicious transactions” with anti-corruption authorities and noted that the
company behind the deal had links to a scandal-mired, former subsidiary of
1MDB.
“We have documents to prove… it’s all part of the 1MDB scam,” the
minister was cited as saying in The Star newspaper.
State-owned Export-Import Bank of China provided 85 percent of the funding
for the project with the rest required to be raised by issuing sukuk, or
Islamic bonds, Lim said.
Najib insisted in a statement late Tuesday there was no wrongdoing in the
project, saying he and Chinese Premier Li Keqiang witnessed the signing of
memoranda of understanding for the deal in Beijing in 2017.
The toppled leader, who has been questioned twice by graft investigators
since losing power, said he was “confident” that all necessary “procedures
and laws have been complied with” in the deal.
He said “great care” should be taken “when making such serious
politically-motivated public allegations involving foreign state-owned
companies as it may have a negative effect on foreign relations and
international trade”.
Public disgust over allegations of corruption linked to Najib and his
cronies was a major factor in his surprise election loss last month to an
alliance headed by Mahathir Mohamad.
BSS/AFP/HR/1125