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Najib arrested, to be charged on Thursday over 1MDB allegations

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Mr Najib's arrest relates directly to the allegation that huge sums from the fund flowed into his bank accounts ahead of a hotly contested election in 2013.

Kuala Lumpur

MALAYSIA'S toppled leader Najib Razak was arrested on Wednesday and will be charged over allegations that US$628 million linked to state investment fund 1MDB ended up in his personal bank accounts, officials said.

Allegations that huge sums were looted from the investment vehicle by Mr Najib and his cronies were a major factor in the shock defeat of his long-ruling coalition at elections in May to a reformist alliance headed by Mahathir Mohamad.

Dr Mahathir, 93, in his second stint as premier after coming out of retirement to take on his ex-protege Mr Najib, has re-opened probes into 1MDB that were shut down by the former government, and vowed to bring Mr Najib to justice.

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Since losing power, Mr Najib has already been arrested and hit with seven charges related to claims he pocketed some US$10 million from a former unit of 1MDB.

However, his arrest on Wednesday related directly to one of the most damaging allegations in the long-running scandal - that huge sums from the fund flowed into his bank accounts ahead of a hotly contested election in 2013.

The Malaysian Anti-Corruption Commission said in a statement that it had detained Mr Najib as part of its investigations into the fund and "the entry of RM2.6 billion (S$860 million) into his personal account".

Mr Najib will appear in court on Thursday afternoon where he faces several charges related to allegedly abusing his position, the anti-corruption commission said.

When reports about the bank transfers surfaced in 2015, they dramatically ratcheted up the scandal surrounding Mr Najib and his inner circle.

The attorney-general later cleared him of any wrongdoing, saying the money was a personal donation from the Saudi royal family, and closed down domestic investigations.

But as allegations related to wrongdoing at the fund multiplied, the leader lurched sharply to the right.

He sacked critics in government, jailed political opponents and introduced increasingly authoritarian laws that analysts said were aimed at silencing any opposition to his rule.

Mr Najib, his family and cronies were accused of using the stolen cash to buy everything from high-end real estate in the United States to pricey artworks.

The US Department of Justice (DOJ), which is seeking to recover items allegedly bought with stolen 1MDB cash in America, estimates that US$4.5 billion in total was looted from the fund.

Following Mr Najib's election loss, police seized a vast trove of items - including expensive handbags and jewellery - from properties linked to him with an estimated value of up to US$273 million.

Investigations into 1MDB have been moving swiftly. Last month, a luxury yacht allegedly bought by a playboy financier with a central role in the scandal returned to Malaysia after being handed over by Indonesia, which impounded it following a DOJ request. AFP