Swiss Wreck Efforts by Malaysia to Contain 1MDB Scandal

The Financial Times (U.K.)

29 January 2016

Malaysia’s leaders are battling the most severe international pressure yet over alleged large-scale corruption after Switzerland torpedoed efforts to contain the growing scandal around the 1MDB investment fund.

Kuala Lumpur’s attempts to play down an affair that has rocked the country and embroiled Najib Razak, the prime minister, have been derailed by a Swiss criminal investigation that said on Friday it found “serious indications“ that about $4bn was misappropriated.

Switzerland’s unusually aggressive intervention reflects international concern that the Malaysian authorities may have been trying to bury the story. Earlier in the week Mohamed Apandi Ali, Malaysia’s attorney-general, cleared Mr Najib of any wrongdoing over payments of $680m into his bank account. Critics alleged the transfers were linked to 1MDB, which the fund and the prime minister deny.

John Pang, a senior fellow at the S. Rajaratnam School of International Studies in Singapore, said the Swiss statement undermined Mr Apandi’s claim that the funds paid into Mr Najib’s account were a donation from the Saudi royal family. “This makes it very difficult for the attorney-general to simply close off the investigation,” Mr Pang said. “It makes the attorney-general’s statement difficult to credit.”

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Last updated on 01/02/2016