Malaysia vows cooperation on US probe into wealth fund

By P Prem Kumar

KUALA LUMPUR (AA) – Malaysia promised Thursday to fully cooperate with the United States Department of Justice (DOJ) after it filed a lawsuit to recover more than $1 billion in assets bought with funds allegedly channeled from embattled state wealth fund 1Malaysia Development Berhad (1MDB).

The DOJ filed a civil lawsuit Wednesday seeking the forfeiture and recovery of the assets linked to what it described in a press statement as an "international conspiracy to launder funds misappropriated" from 1MDB, the largest case ever brought by the Kleptocracy Asset Recovery Initiative.

According to complaints highlighted by U.S. prosecutors, the funds allegedly embezzled and laundered into the country were purportedly used to buy luxury properties in the U.S. and United Kingdom -- including a mansion in Beverly Hills, a penthouse in New York and a townhouse in London -- paintings by Vincent Van Gogh and Claude Monet, a $35 million jet, and to cover gambling debts in Las Vegas.

Prime Minister Najib Razak's press secretary said Thursday that Malaysia’s government is aware of the civil lawsuits brought against the various assets, and would cooperate with any lawful investigation of Malaysian companies or citizens in accordance with international protocols.

"As the Prime Minister has always maintained, if any wrongdoing is proven, the law will be enforced without exception," Tengku Sariffudin Tengku Ahmad said in a statement.

He also noted the Malaysian police are still investigating 1MDB, a state wealth fund created by Razak soon after he assumed premiership in 2009.

U.S. prosecutors said more than $3.5 billion in 1MDB funds were allegedly misappropriated by high-level officials of the local state investment firm and their associates between 2009 and 2015.

The money was allegedly laundered through "complex transactions and fraudulent shell companies" with bank accounts located in Singapore, Switzerland, Luxembourg and the U.S.

The funds were also allegedly used to invest in EMI Music and to fund the production of 2013 Hollywood movie The Wolf of Wall Street, whose co-producer Riza Aziz is a stepson of Razak.

Others named in the complaints are Malaysian businessman Jho Low, who has been implicated in alleged mismanagement at 1MDB, Emirati businessman Khadem Abdulla Al-Qubaisi and Abu Dhabi-based financier Mohammed Ahmed Badawy Al-Husseiny.

In response to the DOJ decision, Malaysia's communications minister, Salleh Said Keruak, urged people not jump to conclusions as no decisions have been made.

He said any claims relating to 1MDB, whether in Malaysia or internationally, must be dealt with cautiously, warning that such issues are being used by those wishing to unseat Razak’s democratically elected government.

"This means that any claims relating to 1MDB must be treated with caution, follow due legal process and adhere to the principle of innocent until proved guilty,” he underlined in a statement. "No one should rush to judgment before allegations are proved in court."

1MDB also responded that it was not a party to the civil suit brought by the DOJ, as it does not have any assets in the U.S. nor has it benefited from the various transactions described in the legal action.

"Furthermore, 1MDB has not been contacted by the U.S. DOJ or any other foreign agency in relation to their investigations."

Meanwhile, Malaysia's parliamentary opposition leader Wan Azizah Wan Ismail demanded that Razak immediately step down to enable a fair and independent investigation by the DOJ and other probing agencies.

She said the premier should swiftly give an explanation and a full account of this matter in an emergency parliamentary sitting called as soon as possible.

She argued that Razak must do so under Article 117 of 1MDB's bylaw, which categorically stated that all "financial commitments (including investments), restructuring or matters involving government guarantees" must obtain the written approval of the Prime Minister. The article was still active when the $3.5 billion was allegedly embezzled but has since been dissolved.

"Seeing that Najib as the Prime Minister had sacked prominent individuals who voiced out their concerns on the 1MDB issue, including former Deputy Prime Minister Muhyiddin Yassin, I call upon the Cabinet to advise His Royal Highness Malaysian King to proclaim the formation of a Royal Commission of Inquiry to investigate the serious claims that the $3.5 billion had been embezzled from 1MDB between 2009 and 2015, and to suggest the prosecution of those involved in this heinous crime,” Wan Ismail said in a statement.

"Seeing that Najib's position as Prime Minister allows him control and influence over key government agencies including the office of the Attorney General, the Royal Malaysian Police and the Malaysian Anti-Corruption Commission, I believe the Malaysian people want him to go on leave as Prime Minister to not create a perception of abuse of power or process to halt or hinder a full and transparent investigation on this very serious issue."