Malaysia sets up task force to probe 1MDB

KUALA LUMPUR - Malaysia has set up a special taskforce that will look into possible criminal conduct of individuals involved in the management of state fund 1Malaysia Development Berhad (1MDB), the prime minister's office said on Monday (May 21).

The taskforce, which will include the Malaysian Anti-Corruption Commission (MACC), police and the central bank, will also be responsible for identifying and seizing assets acquired using funds allegedly siphoned from 1MDB. The fund was set up in 2009 by embattled former prime minister Najib Razak, whose near 10-year rule ended in electoral defeat on May 9.

"This taskforce will also be responsible for seeking cooperation of various enforcement agencies in the United States, Switzerland, Singapore, Canada and other related countries," the office of new Prime Minister Dr Mahathir Mohamad said in a statement.

The team will be led by former Attorney-General Abdul Gani Patail and former anti-graft agency chief commissioner Abu Kassim Mohamed, who both left their posts under Datuk Seri Najib’s government during a previous probe into 1MDB.

The police’s former Special Branch deputy director Abdul Hamid Bador and recently-appointed MACC chief Mohd Shukri Abdull will also lead the group.

The composition mirrors that of an abortive special task force established in the wake of a 2015 Wall Street Journal report alleging that funds from 1MDB were misappropriated and with at least half allegedly transferred into Datuk Seri Najib’s personal bank account.

However, the task force began faltering in 2016 and was eventually halted following reports that officials named in the report were cleared of any wrongdoing.

Mr Abdul Gani was then unceremoniously removed as AG, purportedly for health reasons, and replaced by Mr Apandi Ali who remains in the position only in name after he was put on garden leave last week.

Hours after his new appointment, Mr Abdul Gani told reporters that the task force will meet on Tuesday and then address the media. 

New MACC chief Mr Mohd Shukri told reporters to expect a "special briefing" on Tuesday.

1MDB is under investigation in at least six countries, including the United States where authorities said 1MDB officials have allegedly laundered more than US$4.5 billion (S$6 billion) in funds through a complex web of opaque transactions and fraudulent shell companies.

Singapore authorities said last week that they will extend further assistance to Malaysia on 1MDB-related issues.

"The Singapore authorities have cooperated extensively with their Malaysian counterparts on their past requests for information in relation to 1MDB-related transactions, and are fully prepared to extend further assistance. Singapore has also taken swift action against financial institutions and individuals who have broken laws within our jurisdiction in connection with 1MDB-related fund flows," the Commercial Affairs Department and the Monetary Authority of Singapore said in a statement on May 16.

Dr Mahathir, who was elected just two weeks ago, is moving fast to root out corruption from his administration.

He has prevented those linked to wrongdoing in state finances from leaving the country, drafted a wide scope of investigation into 1MDB, and is set to see the anti-graft agency begin questioning Mr Najib on Tuesday on what the latter knew about US$10.6 million transferred into his bank account from SRC International, a unit of 1MDB.

SRC was created in 2011 by Datuk Seri Najib's government to pursue overseas investments in energy resources, and was a sister company of 1MDB until it was moved to the finance ministry in 2012.

SRC came into focus after the Wall Street Journal reported that funds from the company were transferred using multiple companies as fronts, before reaching Datuk Seri Najib's account.

As these funds were moved through Malaysian, rather than foreign, financial institutions it was easier for MACC investigators to establish the money trail.

The MACC summons came days after police raided six premises linked to Datuk Seri Najib as part of investigations into 1MDB.

Among the items seized were 284 boxes of designer handbags and dozens of bags filled with cash and jewellery from a luxury condominium in the centre of Kuala Lumpur linked to him.

Dr Mahathir had said this past week that he expected Datuk Seri Najib to face criminal charges soon.

The MACC warned on Monday that Datuk Seri Najib can be charged under existing laws if he does not turn up for questioning on Tuesday.

“If he fails to turn up to give his statement, he can be charged under the MACC Act 2009,” MACC deputy chief commissioner (Operations) Azam Baki said.

Striking a defiant tone however, the former premier on Sunday denied stealing public funds and blamed voters for not appreciating his government’s contributions and believing his rivals’ falsehoods.

He also maintained that his United Malays National Organisation party and the Barisan Nasional coalition did no wrong. AGENCIES