Former Malaysian premier Mahathir under probe for defamation

[KUALA LUMPUR] Former Malaysian premier Mahathir Mohamad is under investigation for potential defamation as the country's longest-serving leader continues to pressure Prime Minister Najib Razak to step down.

Police opened several investigation papers after reports were made against Dr Mahathir, deputy prime minister Zahid Hamidi said in a written reply to a parliamentary question dated Wednesday. He said the probes relate to Section 500 of the penal code on defamation, and there was no immediate information on who filed the reports.

Tan Kok Wai, a member of parliament from the opposition Democratic Action Party, had asked what actions authorities were taking against Dr Mahathir for his criticisms of Nr Najib. One case will be referred to the deputy public prosecutor for review after the investigation is completed, and another has been referred to the attorney general, Mr Zahid said. A spokesman for Dr Mahathir said he had no immediate comment on Mr Zahid's remarks.

In August 2014 Dr Mahathir said he was withdrawing support for Mr Najib, citing worsening race relations and a tougher business environment after the premier took office in 2009. Since then Dr Mahathir, 90, has been on a campaign to get Mr Najib out, warning the United Malays National Organisation - in power since independence in 1957 - risked losing the next general election if he stays as leader. He escalated his criticisms after the Wall Street Journal reported on hundreds of millions of dollars that ended up in Mr Najib's private accounts before the last election in 2013.

Mr Najib has acknowledged the money made it to his accounts but said it was political donations from the Middle East rather than public funds, an initial conclusion also reached by the Malaysia Anti-Corruption Commission. The accounts have since been closed. The receipt of political funds was to meet the needs of the party and the community and wasn't a new practice, the official Bernama news agency reported in August, citing Mr Najib.

South-east Asia's third-largest economy has been roiled by the scandal that has spooked foreign investors and contributed to a sell-off in Malaysian markets. Foreign investors pulled about 19.2 billion ringgit from stocks and bonds last quarter and sent the currency to a 17-year low. While the ringgit has pared losses it is still down more than 18 per cent this year.

BLOOMBERG