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Malaysia to address US$700m fund scandal linked to Najib

Tuesday, October 20, 2015 - 14:59
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Malaysia's government will explain to parliament how US$700 million of political donations ended up in Prime Minister Najib Razak's personal bank as the administration seeks to diffuse an attempt by opposition lawmakers to bring a no-confidence vote against him.

[KUALA LUMPUR] Malaysia's government will explain to parliament how US$700 million of political donations ended up in Prime Minister Najib Razak's personal bank as the administration seeks to diffuse an attempt by opposition lawmakers to bring a no-confidence vote against him.

Queries on the funds will be answered in the current sitting of the legislature that ends Dec 3, Azalina Othman Said, a minister in the Prime Minister's Department, said in a written reply to a lawmaker's inquiry. The date that the topic will be addressed hasn't been determined and she didn't specify who will present the explanation.

The Wall Street Journal reported on July 3 that about US$700 million may have moved through government agencies and state- linked companies to accounts bearing Mr Najib's name before elections in 2013. The premier has denied taking money for personal gain and has described the furor as part of a campaign to remove him from office.

"How were the donations used, who received it and did the person pay taxes and make an official declaration," said Lim Guan Eng, a lawmaker with the opposition Democratic Action Party and chief minister of Penang state. "How much money is left? Give details of the bank accounts."

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 (S$6.27 billion) from stocks and bonds last quarter and sent the currency to a 17-year low. While the ringgit has pared losses, its still the worst performer in Asia this year having lost 18 per cent.

The three-month old case has also fueled political tensions, prompting Najib to reshuffle his cabinet to remove detractors including his deputy. Thousands of anti-government protesters rallied in August in Malaysia's capital, urging Najib to resign, and the opposition People's Justice Party filed its no-confidence motion this week, saying Najib has failed to address allegations he received funds linked to debt-ridden state investment company 1Malaysia Development Bhd.

Mr Najib has acknowledged the money reached 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 Aug 9, citing Mr Najib.

While the motion against Mr Najib faces obstacles even getting heard, let alone voted on, the opposition is looking to keep the pressure on Mr Najib, who has also been targeted for criticism by former premier Mahathir Mohamad, who has called on the prime minister to step aside. Parliamentary opposition leader Wan Azizah Wan Ismail said Monday she will submit a new motion for the vote, while the earlier one by the lawmaker from her party will be retracted.

BLOOMBERG