1MDB probe shows Najib spent millions on luxury goods: Report

KUALA LUMPUR — Malaysian investigation documents have reportedly revealed how money originating from state investment fund 1Malaysia Development Berhad (1MDB) was transferred into Prime Minister Najib Razak’s bank accounts and subsequently used for personal expenses, the Wall Street Journal (WSJ) reported on Thursday (March 31) — apparently undermining Mr Najib’s claims that the money was never used for personal gain.

This comes as Luxembourg’s state prosecutor launched a judicial inquiry into allegations of money laundering, covering payments totalling hundreds of millions of dollars, against 1MDB.

According to WSJ’s report on Thursday — which comes days after the Australian Broadcasting Corporation (ABC) aired a documentary on the huge sums of money that have allegedly flowed into Mr Najib’s account — some US$15 million (S$20.2 million) was spent on clothes, jewellery and a car over a five-year period, based on the bank-transfer information, involving stores in the United States, Malaysia and Italy.

The purchases were reportedly paid for out of Mr Najib’s AmBank bank accounts and the money in those accounts is believed to have come from 1MDB.When contacted, the Prime Minister’s office referred Reuters to its previous statements that said the funds received by Mr Najib was a gift from the royal family of Saudi Arabia. It did not immediately respond to claims of payments from personal purchases.

According to WSJ’s report, of the US$15 million, the lion’s share — US$14 million went to a company called Jakel Trading, which sells luxury clothes, fabrics and furnishings, between 2011 and 2014.

Mr Najib also racked up large credit card charges, WSJ reported. Two days before Christmas Eve 2014, Mr Najib reportedly charged US$130,625 to his Visa card at a Chanel store in Honolulu. A person at the store recalled that Mr Najib’s wife, Madam Rosmah Mansor, had shopped at the store just before Christmas.

Mr Najib had been in Hawaii during that period and was widely reported to have played golf with US President Barack Obama.

A few months before the trip, that bank account received US$9 million from an entity known as SRC International. SRC subsequently transferred another US$9 million into this account the day after the golf game with Mr Obama. SRC International, part of Malaysia’s Finance Ministry, is a former unit of 1MDB.

This account was also used to pay for charges from Mr Najib’s credit card of about €750,000 (S$1.15 million). This was for transactions made at the Italian branch of De Grisogono, a Swiss-owned jewellery store in August 2014.

Records also showed that in June 2011, a car dealership in Kuala Lumpur called Signature Exotic Cars received US$56,000, reported the paper. Attempts by WSJ to get comments from all parties concerned, including Mr Najib and his wife, were unsuccessful.

Apart from personal spending, the documents viewed by WSJ purportedly also showed that Mr Najib made more than 500 payments from his accounts to organisations, politicians, think tanks and lawyers just before the 2013 Malaysian general elections.

The payments made during this period include almost US$7 million that was sent to the private account of Mr Nazir Razak, who is the chairman of CIMB Group Holdings. Mr Nazir is also the brother of Mr Najib.

In a written statement, Mr Nazir confirmed to WSJ that he received the money, which was given out according to the instructions of ruling party leaders. The money was disbursed to ruling party politicians. “The entire amount was paid out in cash to various recipients according to the instructions of the party president and the account was closed with a zero balance,” he wrote. “I had no knowledge whatsoever that these funds may have originated from any other source(s).”

Mr Najib, 62, is under pressure over US$680 million (S$920 million) deposited into his private accounts as well as problems in 1MDB. He has denied any wrongdoing, maintaining that he did not use the funds for personal gain, and was cleared of any criminal offence or corruption.

Meanwhile, Luxembourg prosecutor said a judicial inquiry was launched following evidence that funds held by the Malaysian government in offshore accounts in Singapore, Switzerland and Luxembourg had been misused.

“The investigation aims to trace the origin of four transfers in 2012 and one in at the start of 2013 for a total of several hundreds of millions of dollars,” the prosecutor said in a statement on Thursday (THURS).

The allegations concerned in particular the sums paid upon the issuance of two bonds in May and October 2012.

1MDB, whose advisory board is chaired by Mr Najib, has been the subject of multiple investigations over the last year by authorities in Malaysia, Switzerland, Singapore and the United States following accusations of financial mismanagement and graft.

The fund has previously denied all allegations while saying it would cooperate with investigations. It did not immediately respond to an email seeking comment on the Luxembourg inquiry. AGENCIES