Malaysia central bank urged to reopen probe on indebted fund

Markets Associated Press

Malaysian opposition lawmakers urged the central bank Thursday to reopen its investigation into indebted state investment fund 1MDB that is being probed in several countries for money laundering and implicating Prime Minister Najib Razak.

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Some 30 lawmakers staged a protest march from Parliament to the central bank, holding up a banner that read "Love Malaysia, hate kleptocracy." Opposition leader Wan Azizah Wan Ismail said the central bank must reopen its probe based on evidence in the U.S. court filing.

The 1MDB fund has been at the center of investigations in the U.S. and several countries amid allegations of a global embezzlement and money-laundering scheme. Najib started the fund shortly after taking office in 2009 to promote economic development projects but the fund accumulated billions in debts over the years.

The U.S. Justice Department says at least $3.5 billion has been stolen from 1MDB by people close to Najib and has initiated action to seize $1.3 billion it says was taken from the fund to buy assets in the U.S. The government complaints also say that more than $700 million has landed in the accounts of "Malaysian Official 1." They did not name the official, but appear to be referring to Najib.

The central bank "must be neutral and cannot protect any parties," Wan Azizah Wan Ismail said.

The Justice Department's court filing shows much of the wealth in question was moved through offshore dealings and bank accounts in Singapore, Switzerland, Luxembourg and the U.S. The evidence cited includes details of wire transfers of hundreds of millions of dollars.

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It also says the wife of "Malaysian Official 1" received a 22-carat pink diamond necklace worth $27.3 million in 2014 purchased with from funds stolen from 1MDB.

During Thursday's protest march, lawmakers held paper cutouts in the shape of a pink diamond with the wordings: "The biggest robbery in the world."

Najib has resisted calls for him to resign and remains firmly in control by clamping down on critics and because of unwavering support of most ruling party members.

His real test will come in general elections due in mid-2018. Najib's ruling coalition won the last elections in 2013 but lost the popular vote to an opposition coalition.