Saudi Arabia says donation to Malaysian premier was genuine

[KUALA LUMPUR] Saudi Arabia said a large donation to Malaysian Prime Minister Najib Razak was "genuine," providing some clarity on the source of the funds amid reports the money came via a Malaysian state investment company.

Saudi authorities were aware of the donation and it came without strings, Malaysia's official news agency Bernama reported, citing Saudi Foreign Minister Adel Al-Jubeir.

He was speaking to reporters in Istanbul on Thursday after meeting with Mr Najib during the Organisation of Islamic Cooperation summit.

"It is a genuine donation with nothing expected in return," Al-Jubeir was quoted as saying. "We are also fully aware that the attorney general of Malaysia has thoroughly investigated the matter and found no wrongdoing. So, as far as we are concerned, the matter is closed."

The Saudi comments follow earlier reports by media including the Wall Street Journal that the money came instead from entities linked to 1Malaysia Development Bhd, the debt- ridden state fund whose advisory board Mr Najib chairs.

1MDB, which is selling assets to pare its debt, is the subject of various probes both at home and abroad into its finances.

Mr Najib is facing his biggest political crisis since coming to power seven years ago amid questions over the US$681 million that appeared in his accounts before the 2013 election, which the ruling coalition, in power since independence in 1957, won with its slimmest margin yet.

Attorney General Mohamed Apandi Ali in January closed the door on a graft probe of Mr Najib, clearing him of wrongdoing over the "personal contribution" from Saudi royals.

The premier returned US$620 million in August 2013 that was not utilized, Apandi said, without specifying what the rest of the funds were used for. Mr Najib has maintained the funds were not used for private benefit.

Mr Najib allegedly received millions of dollars in his personal accounts between 2011 and 2013 from the Saudi finance ministry and two men identifying themselves as princes from the Middle Eastern nation, the Australian Broadcasting Corp reported late last month.

BLOOMBERG