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MALAYSIA-POLITICS-CORRUPTION
1MDB: Malaysia’s extraordinary financial scandal
KUALA LUMPUR, July 3, 2018 (BSS/AFP) – Malaysia’s extraordinary 1MDB
corruption scandal allegedly saw billions stolen from the country’s soverign
wealth fund and spent on everything from Hollywood films to handbags.
Former Prime Minister Najib Razak was arrested Tuesday in the 1MDB graft
probe set up by his successor, which has engulfed the ex-leader and his
cronies since his shock loss at elections in May.
Here is a look back at the saga:
– What is 1MDB? –
1Malaysia Development Berhad (1MDB) is a state investment fund which Najib
launched in 2009 shortly after becoming prime minister.
Its portfolio has included power plants and other energy assets in
Malaysia and the Middle East, and real estate in Kuala Lumpur.
The fund was closely overseen by Najib.
Whistle-blowers say Low Taek Jho, or “Jho Low”, a shadowy, jet-setting
Malaysian financier close to Najib but who has no official positions, helped
set up 1MDB and made key financial decisions.
After the scandal emerged, Najib purged 1MDB critics from his government,
curbed domestic investigations, enacted a tough new security law and
generally lurched to the right.
Analysts accused him of imperilling Malaysia’s already fragile democracy
to save his skin.
– How did the scandal emerge? –
Concerns escalated in 2014 as 1MDB slid into an $11 billion debt hole, and
the intensifying public scrutiny led to a string of revelations concerning
missing funds.
The issue exploded in July 2015 when the Wall Street Journal published
documents showing Najib received at least $681 million in payments to his
personal bank accounts.
The US Justice Department has piled on the pressure by filing lawsuits to
seize some $1.7 billion in assets it said were purchased with stolen 1MDB
money.
– What are some key Justice Department allegations? –
US authorities allege that more than $4.5 billion was stolen from 1MDB by
high-level officials at the fund and their associates between 2009 and 2015.
They said a figure it calls “Malaysian Official 1” knowingly received huge
sums of 1MDB money. A Malaysian cabinet minister has since confirmed that
official was Najib.
Tens of millions of dollars in stolen money were used in 2012 by Najib’s
stepson Riza Aziz, an aspiring film producer, to fund the Hollywood film “The
Wolf of Wall Street” starring Leonardo DiCaprio.
Hundreds of millions were used, mainly by Riza and Low, to purchase high-
end real estate in Beverly Hills, New York, and London, a Monet painting for
$35 million, a Van Gogh for $5.5 million, a $35 million Bombardier jet and a
$100 million stake in EMI Music Publishing.
Low, who has been photographed partying with the likes of Paris Hilton and
DiCaprio, allegedly used more than $250 million in stolen cash from 1MDB to
buy a 300-foot (90-metre) luxury yacht.
– Has anyone faced justice? –
Several private bankers have been jailed and banned from working in the
financial industry in Singapore after being found guilty of charges related
to the scandal.
Singapore has also shut down the local operations of two Swiss-based banks
involved in the scheme.
JP Morgan Chase’s Swiss unit was found to have committed serious breaches
of anti-money laundering regulations in its dealings with 1MDB, according to
the Swiss financial markets watchdog, but no fines or other sanctions were
imposed.
But so far no big fish have been hooked.
In 2017 the Wall Street Journal reported that US authorities plan to file
criminal charges against Low relating to wire fraud and money-laundering.
Najib shut down domestic Malaysian investigations, denying wrongdoing and
saying the scandal was concocted by his political enemies.
– What will happen to Najib now? –
Najib’s dramatic election left him facing the possibility of prosecution
and imprisonment.
The election winner, 92-year-old Mahathir Mohamad, has pledged to
investigate the scandal and try to recover stolen funds from 1MDB that have
been sent abroad.
Najib and his wife Rosmah Mansor, a deeply unpopular figure due to her
reported love of luxury shopping trips and imperious manner, were barred from
leaving the country soon after the election as speculation mounted the pair
would flee the country.
BSS/AFP/FI/ 1715 hrs