Switzerland orders freeze of Malaysian state fund assets

Swiss banks freeze assets belonging to 1Malaysia Development Berhad (1MDB) amid major corruption scandal

Photo by: Reuters
Photo by: Reuters

Malaysian Prime Minister Najib Razak

Authorities in Switzerland have ordered the freezing of assets belonging to Malaysia’s struggling state investment fund, 1Malaysia Development Berhad (1MDB) in Swiss banks after an investigation was launched into an alleged corruption and money laundering scandal.

"The Office of the Attorney General of Switzerland (OAG) has frozen assets amounting to several tens of millions of US dollars on Swiss bank accounts," the OAG announced, in an emailed statement, Reuters reported.

"At this early stage of the procedure, the OAG is analysing and consolidating evidence. The OAG is already in contact with the Malaysian authorities. International cooperation with foreign countries, in particular with Malaysia, will probably be necessary to establish the facts," the statement added.

The decision comes after Malaysia’s anti-corruption agency claimed last month that nearly $700 million deposited into Malaysian Prime Minister Najib Razak’s personal bank accounts were “donations” and did not originate from the debt-laden 1MDB.

The Malaysian Anti-Corruption Commission (MACC), announced in a statement that 2.6 billion ringgit ($675.15 million) transferred into Najib’s accounts were discovered to be a “contribution from donors, and not from 1MDB.”

In early July, the Wall Street Journal published an article reporting that the money came from entities linked to 1MDB state investment fund. MACC’s findings however, effectively clear the prime minister of any criminal wrongdoing, without going into detail about the donor or donors to his personal accounts or how the money was spent.

Both 1MDB and Najib have denied the allegations, with 1MDB releasing a statement early August thanking the MACC.

1MDB, set up by Najib in 2009 to develop new industries, has accumulated 42 billion ringgit ($10.9 billion) in debt and was criticised for its enormous debt and lack of transparency.

Najib has denied allegations and has dismissed those who have challenged him. Attorney General Abdul Gani Patail was one of the four officials leading the investigation before he was removed from office three months before his retirement.

Gani had confirmed receiving documents that linked Najib to 1MDB fund, which could have meant a political scandal and criminal charges for Najib.

Najib announced the removal of Deputy Prime Minister Muhyiddin Yassin and four other cabinet members after they urged Najib to publicly respond to the 1MDB allegations in a televised statement, saying “Members of the cabinet should not air their differences in an open forum that can affect public opinion against the government and Malaysia.”

Police to question ex-PM

Malaysian police said on Wednesday that they wanted to question former prime minister Mahathir Mohamad over his role in anti-government protests amid the ongoing financial scandal.

The 90-year-old former leader and political veteran, who is currently on a private trip to Jordan, was among protesters calling for the toppling of Prime Minister Najib in Kuala Lumpur over the weekend.

During the protests on Sunday, Mahathir, a former patron to Najib, called Najib a corrupt leader. On his personal blog on Tuesday, Mahathir added that he had only participated in the protest because Najib had blocked every other legal method to express opposition.

"Tun (Mahathir) made several allegations in his speeches ... that warrants police action," police spokeswoman Asmawati Ahmad announced, saying he would be required to give a statement to Inspector-General of Police Khalid Abu Bakar.

Mahathir’s aide Sufi Yusoff, however, told Reuters that the police are yet to formally approach him. "We will comply with the police on whatever is needed," Yusoff said.

The Malaysian government previously announced that they would consider the weekend protests as illegal. It is highly expected a number of protest leaders will be arrested in the course of the next 24 hours, Reuters reported.

TRTWorld and agencies