Malaysian premier cleared of wrongdoing in $700 million scandal

Najib Razak, the Malaysian prime minister centre, reacts as he leaving after attending a parliament session in Kuala Lumpur. he was cleared for any wrong-doing in a $700m donation scandal. EPA

KUALA LUMPUR // Malaysia’s attorney general said Tuesday that nearly $700 million channelled into Najib Razak’s private accounts was a personal donation from Saudi Arabia’s royal family, and cleared him of any criminal wrongdoing.

The announcement capped months of uncertainty for the Malaysian prime minister, who has been fighting intense pressure to resign over the financial scandal in his biggest political crisis since he took power in 2009.

But the announcement by Attorney General Mohammed Apandi Ali did not clear up the mystery over the money as he did not say why the Saudi royals made the donation or give details on what the money was to have been used for.

Mr Apandi said investigations by the country’s anti-corruption agency showed that no criminal offence was committed as the $681m transferred into Mr Najib’s accounts between March and April 2013 was “given without any consideration” by the Saudis as a personal donation.

He said Mr Najib returned $620m to the Saudi royal family in August 2013 as the money was not utilised. He did not elaborate and did not say what happened to the remaining $61m.

The anti-corruption agency met and recorded statements from witnesses, including the donor, he said.

Mr Apandi said no reason was given for the donation, which was a matter between Najib and the Saudis. He said there was no proof that the money was given as an inducement or reward to Mr Najib in return for a favour.

“I am satisfied that there is no evidence to show that the donation was a form of gratification given corruptly,” Mr Apandi said. “Based on the evidence from witnesses and supporting documents submitted, I am satisfied that no criminal offence has been committed in relation to the said ($681m) donation.”

There was no immediate comment from Mr Najib, who has been grappling with deep unhappiness over his leadership, with massive street rallies in August calling for his resignation after documents leaked in July suggested that about $700 million was deposited in his private bank accounts from entities linked to indebted state investment fund 1MDB.

Mr Najib has denied any wrongdoing and later said the money was a donation from the Middle East. He has reportedly told ruling-party events that the money was “political funding”. Since then, he has replaced critics in his government with loyalists, sacked the then attorney general probing him and cracked down on the media that had helped kept him in power.

Saudi officials in Riyadh had no immediate comment about the investigation. It also was not mentioned on the state-run Saudi Press Agency.

Opposition politician Tony Pua slammed Apandi’s decision, saying the fact it was a personal donation does not rule out corrupt motives or transaction.

Mr Pua said Apandi provided no new or convincing information to support his decision.

The scandal started with investigations into 1MDB, which was set up in 2009 by Mr Najib to develop new industries. But it amassed 42 billion ringgit ($9.8bn) in debt after its energy ventures abroad faltered. Critics have long voiced concern over its massive debt and lack of transparency. Mr Najib still chairs its advisory board.

The political scandal partly contributed to the Malaysian currency plunging to a 17-year low last August.

* Associated Press