Malaysia ruling party closes ranks behind Najib after meeting

[KUALA LUMPUR] Malaysia's ruling party closed ranks around Prime Minister Najib Razak at a meeting of its supreme council, with his ousted deputy pledging loyalty amid a funding scandal that has dented the country's financial markets.

Former deputy premier Muhyiddin Yassin made the promise to the United Malays National Organisation, Mr Najib told reporters after chairing the top party meeting on Wednesday. Mr Muhyiddin was removed from his post in late July after publicly calling for answers on the imbroglio surrounding debt-ridden state investment company 1Malaysia Development Bhd, including its investment decisions.

"I welcome the solidarity, unity and loyalty pledge to UMNO," Mr Najib said with Mr Muhyiddin standing silently next to him. Mr Muhyiddin, who remains UMNO's deputy president, has also pledged to ensure a victory in the next national election for the broader Barisan Nasional coalition, Mr Najib said.

Southeast Asia's third-largest economy has faced more than two months of upheaval over claims Mr Najib received billions of ringgit linked to 1MDB in his private accounts. Mr Najib denied the allegations, fired several critics and pushed back against detractors, while the government has transferred some 1MDB investigators to different posts.

Mr Muhyiddin was replaced by Ahmad Zahid Hamidi as deputy prime minister after he said it was unlikely that Barisan Nasional would win if elections were held now. In the 2013 ballot the coalition lost the popular vote for the first time even as it retained office. UMNO has been in power since independence in 1957.

Mr Najib in recent weeks has called for unity within UMNO over 1MDB and his handling of the economy as he beds down unpopular measures such as a goods and service tax, as infighting would erode support for the government and party.

BLOOMBERG