File Photo: Malaysian Prime Minister Najib Razak (Reuters)
Kuala Lumpur:
Malaysia's central bank said today it had formally recommended that criminal proceedings be launched against a state-owned company linked to Prime Minister Najib Razak and which is at the centre of a massive corruption scandal.
The recommendation, which has since been dismissed by a Najib-appointed attorney general, was first made by the central Bank Negara in August but only disclosed for the first time on today.
Najib and the company that he launched 1Malaysia Development Berhad (1MDB) have been under intense pressure to explain more than a billion dollars of money allegedly missing from overseas investments.
Najib also has been rocked by the sensational revelation in July that nearly $700 million in mysterious transfers had been made to his personal bank accounts, and which remain unexplained.
Najib, 62, and 1MDB have repeatedly denied any wrongdoing, and have insisted that no 1MDB money made it into his accounts.
Bank Negara said it had recommended in August that the attorney-general "initiate criminal prosecution against 1MDB for breaches" of laws on overseas money transfers.
Bank Negara also directed 1MDB, an investment vehicle launched in 2009 by Najib, to repatriate $1.83 billion that the bank said was invested abroad based on inaccurate or incomplete disclosures.
It gave no further details. It was not immediately clear what has become of the $1.83 billion.
The central bank is perhaps the most respected government institution in Malaysia, and even if no charges result, the revelation casts a further cloud over Najib's handling of the affair.
Najib fired Malaysia's longtime attorney general in July amid speculation that he was preparing criminal charges against the premier, replacing him with his own appointee.
Police also have raided the country's anti-corruption agency, which also was pursuing investigations. The various investigations are now widely believed to be stalled, though government officials insist that is not true.
The central bank's statement appeared to be an attempt to set the record straight following a statement issued Thursday by the Najib-controlled attorney-general's office, which had declared that no wrongdoing by 1MDB had been found.
Crisis of Confidence
The affair has deeply tarnished Najib just as his United Malays National Organisation (UMNO), which has controlled the country for nearly six decades, already faced steadily sliding support over repressive tactics, corruption, Najib's economic stewardship and other issues.
In another blow, the respected Islamic sultans who serve as the ceremonial rulers of nine states, issued a rare joint statement Wednesday saying the scandals had created a "crisis of confidence" and called for a full investigation.
Najib's government retains a tight grip on key institutions like the police, however, and analysts say he continues to command the allegiance of powerful party leaders under a system critics say is rife with money politics.
Malaysia's next elections are not until 2018.
But regulators in the United States and elsewhere are now reportedly scrutinising the complex money trails, with authorities in Switzerland and Singapore announcing they have frozen millions of dollars in funds as they probe possible money-laundering and other crimes.
Najib's political allies say the huge deposits into his personal accounts were "political donations" from unspecified Middle Eastern sources, but no details have been provided.
The donations claim is widely mocked by Najib's opponents, including some ruling-party figures
The recommendation, which has since been dismissed by a Najib-appointed attorney general, was first made by the central Bank Negara in August but only disclosed for the first time on today.
Najib and the company that he launched 1Malaysia Development Berhad (1MDB) have been under intense pressure to explain more than a billion dollars of money allegedly missing from overseas investments.
Najib also has been rocked by the sensational revelation in July that nearly $700 million in mysterious transfers had been made to his personal bank accounts, and which remain unexplained.
Najib, 62, and 1MDB have repeatedly denied any wrongdoing, and have insisted that no 1MDB money made it into his accounts.
Bank Negara said it had recommended in August that the attorney-general "initiate criminal prosecution against 1MDB for breaches" of laws on overseas money transfers.
Bank Negara also directed 1MDB, an investment vehicle launched in 2009 by Najib, to repatriate $1.83 billion that the bank said was invested abroad based on inaccurate or incomplete disclosures.
It gave no further details. It was not immediately clear what has become of the $1.83 billion.
The central bank is perhaps the most respected government institution in Malaysia, and even if no charges result, the revelation casts a further cloud over Najib's handling of the affair.
Najib fired Malaysia's longtime attorney general in July amid speculation that he was preparing criminal charges against the premier, replacing him with his own appointee.
Police also have raided the country's anti-corruption agency, which also was pursuing investigations. The various investigations are now widely believed to be stalled, though government officials insist that is not true.
The central bank's statement appeared to be an attempt to set the record straight following a statement issued Thursday by the Najib-controlled attorney-general's office, which had declared that no wrongdoing by 1MDB had been found.
Crisis of Confidence
The affair has deeply tarnished Najib just as his United Malays National Organisation (UMNO), which has controlled the country for nearly six decades, already faced steadily sliding support over repressive tactics, corruption, Najib's economic stewardship and other issues.
In another blow, the respected Islamic sultans who serve as the ceremonial rulers of nine states, issued a rare joint statement Wednesday saying the scandals had created a "crisis of confidence" and called for a full investigation.
Najib's government retains a tight grip on key institutions like the police, however, and analysts say he continues to command the allegiance of powerful party leaders under a system critics say is rife with money politics.
Malaysia's next elections are not until 2018.
But regulators in the United States and elsewhere are now reportedly scrutinising the complex money trails, with authorities in Switzerland and Singapore announcing they have frozen millions of dollars in funds as they probe possible money-laundering and other crimes.
Najib's political allies say the huge deposits into his personal accounts were "political donations" from unspecified Middle Eastern sources, but no details have been provided.
The donations claim is widely mocked by Najib's opponents, including some ruling-party figures
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