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Update: Switzerland asks Malaysia again for help with 1MDB case

Thursday, October 6, 2016 - 14:10
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Swiss prosecutors have asked Malaysian authorities for a second time to help gather evidence in a case against those accused of embezzling funds from 1Malaysia Development Bhd after an initial request in January went unanswered.

[GENEVA] Swiss prosecutors have asked Malaysian authorities for a second time to help gather evidence in a case against those accused of embezzling funds from 1Malaysia Development Bhd after an initial request in January went unanswered.

Some US$800 million in natural-resource investments from a Malaysian sovereign fund known as SRC appears to have been misappropriated, hidden in part through the creation of a Ponzi scheme, the Swiss Attorney-General's office said Wednesday in a statement on its website. SRC International, a company that was linked to debt-ridden state investment company 1MDB, is now controlled by the Malaysian finance ministry.

Swiss, Singaporean and US prosecutors are digging into how more than US$3.5 billion was diverted from 1MDB, which was intended to finance development projects across Malaysia. US prosecutors filed a request in July in California court to seize more than US$1 billion in real estate, art and other luxury goods bought with allegedly stolen money.

The Swiss Attorney-General's office said Wednesday it's satisfied with the evidence it received from Singaporean authorities and noted that its January request for help from the Malaysians is still pending.

Diplomatic Channel

The Malaysian Attorney-General's Chambers said Thursday that it hadn't received an official request for mutual assistance from its Swiss counterpart through the diplomatic channel, as provided and legally required under its laws.

"This Chambers wishes to reiterate its commitment in international cooperation and will appropriately consider the request in accordance with the law once it is received through the diplomatic channel in accordance with the relevant provisions of Malaysian law relating to mutual legal assistance," it said in a statement on its website.

1MDB referred requests for comment to the attorney general's office and said it hadn't been contacted by the Swiss or any other foreign authority in relation to their investigations. It has consistently denied wrongdoing.

The Malaysian Ministry of Finance didn't reply for a comment on the issue, while the Singapore Attorney-General's Chambers confirmed the additional request of mutual assistance from the Swiss.

'Against Protocol'

Malaysia's Communications and Multimedia Minister Salleh Said Keruak has been critical of Switzerland's approach and said in February that Swiss Attorney-General Michael Lauber acted "against protocol" in speaking publicly to the media about the scandal.

Malaysia's government has said it will cooperate with lawful investigations of local companies or its citizens in relation to 1MDB. Mr Salleh urged caution in July on any claims related to 1MDB and said the fund has been the subject of unprecedented politically-motivated attacks aimed at unseating Prime Minister Najib Razak.

Malaysian Attorney General Mohamed Apandi Ali said in July that no evidence from any investigation conducted by any law enforcement agency in various jurisdictions has showed money had been misappropriated from 1MDB.

1MDB has been at the centre of probes at home and abroad as authorities seek to determine if some of the billions of dollars it raised were siphoned off. While it has denied wrongdoing, a report by a Malaysian parliamentary committee in April identified at least US$4.2 billion of questionable transactions. Investigators are faced with a complex web of transactions, some of which involve companies with similar names.

The Swiss Attorney-General's office said that at this stage of criminal proceedings in connection with 1MDB and SRC, there are four people and one bank under investigation.

An analysis of financial documents the Swiss prosecutor's office has gathered in investigating the 1MDB affair "brought up serious suspicion of the possible implication of Swiss banks in these alleged criminal activities," Swiss Attorney-General Michael Lauber said in a speech in Singapore on Wednesday.

BLOOMBERG