Parliament report on Malaysia's #1MDB blames board; calls for probe into ex-CEO

KUALA LUMPUR: A Malaysian parliamentary inquiry into 1Malaysia Development Bhd (1MDB) said the board of the troubled state fund had failed to carry out its responsibilities and its former chief must be further investigated.

The bipartisan Public Accounts Committee (PAC), which tabled the much delayed report in parliament on Thursday (Apr 7), said it found the financing and performance of 1MDB "unsatisfactory".

It called for the advisory board of the fund - chaired by Prime Minister Najib Razak - to be abolished and any reference to the prime minister be changed to finance minister in the company's memorandum and articles of association.

This is one of the final reports on investigations into alleged mismanagement at 1MDB, and a financial scandal surrounding Mr Najib. Mr Najib, who founded the state investment fund 1MDB in 2009, has battled for months to fend off allegations that billions of dollars were looted from 1MDB in complex overseas financial transactions. He and 1MDB have consistently denied wrongdoing. 

But the PAC said more than US$3 billion in unapproved payments were made from 1MDB funds, and alleged "restrictions and weaknesses" in 1MDB's management. The PAC said former 1MDB CEO Shahrol Azral Ibrahim Halmi has to take responsibility.

"As such, enforcement agencies are asked to investigate Shahrol Azral Ibrahim Halmi and anyone else related," according to a summary of the report. Mr Shahrol was 1MDB's CEO from 2009 to 2013.

The Prime Minister's Office lauded the PAC report as comprehensive and conclusive.

OVERSEAS BANK STATEMENTS

Shortly after it was released, opposition leader Tony Pua, who was part of the PAC, told a news conference the report vindicates critics of 1MDB. It "confirms gross mismanagement and wanton neglect of all principles of good governance and accountability" at the fund, he said.

"I think at the very least (Najib) should be held ministerially culpable. Anything else we don't know, as we don't have the overseas bank statements of 1MDB," said Mr Pua, an MP with the Democratic Action Party (DAP). Mr Najib was not named directly in the report.

Mr Pua lamented the failure to get crucial information on 1MDB's foreign banking transactions, which are the subject of money-laundering and fraud investigations in the United States, Switzerland, Luxembourg and Singapore. The 1MDB fund has denied those allegations.

Concern over 1MDB began after its debt rose from 5 billion ringgit in 2009 to 42 billion ringgit (US$10.77 billion) by 2014, the report said. The fund sold its land and power assets last year as part of a restructuring plan to pare down its debt pile.

The PAC began its probe into 1MDB last May. The committee's work stalled in July when PAC chairman Nur Jazlan Mohamed stepped down after being appointed deputy home minister.

'SHOCKING MISDEEDS'

Pua said "many other shocking misdeeds and transgressions" were disclosed in the report which would provide "sufficient damning evidence to indict not only the entire top management, but also the entire Board of Directors".

An interim report by the auditor-general last year found nothing suspicious after vetting the fund's accounts. Malaysia's attorney-general rejected a call by the central bank to initiate criminal proceedings against 1MDB.

The Wall Street Journal, citing documents from international probes, reported that investigators believe nearly US$1 billion moved through state agencies, banks and companies linked to 1MDB before eventually finding its way into Mr Najib's personal accounts.

The 1MDB fund has denied that any of its funds went to the prime minister. The Attorney-General cleared Mr Najib in January of any corruption or criminal offences, saying the US$681 million was a gift from a member of Saudi Arabia's royal family and that most of it was returned.

The scandal has rocked Mr Najib's government as public outrage over the alleged mismanagement and corruption grows. The scandal has fuelled a sense of crisis in a country under economic strain from slumping oil prices and a prolonged slide in its currency last year.

Swiss authorities have said as much as US$4 billion may have been stolen from 1MDB. Authorities in Switzerland, the United States, Singapore, Hong Kong and elsewhere are investigating.

PM NAJIB IN THE SPOTLIGHT

Critics have alleged debt-stricken 1MDB, set up to fuel Malaysian development projects, was bled dry in a vast campaign of fraud and embezzlement stretching from the Middle East to the Caymans.

The Wall Street Journal, which has detailed many of the money movements, also last year revealed the US$681 million payment made to Najib's bank accounts in 2013. It has said in subsequent reports that he may have received more than US$1 billion.

Mr Najib has taken steps to scuttle official investigations, purge officials demanding accountability, and stifle media reporting on the scandals.

He initially denied taking the US$681 million but his government now claims he accepted a "donation" from the Saudi royal family, most of which was given back. Saudi Arabia is yet to confirm that explanation, which is widely dismissed in Malaysia as a cover story.

The Journal last week said documents show the same bank accounts of Mr Najib were used to purchase US$15 million in luxury goods and pay out millions more to political figures ahead of 2013 elections.

The newspaper also reported that some of the money used to make Hollywood hit The Wolf of Wall Street, a movie about financial corruption starring Leonardo DiCaprio, was laundered from 1MDB.

'WE WILL STUDY AND ACT ON REPORT'S RECOMMENDATIONS': PM NAJIB

"The report has identified weaknesses in 1MDB’s capital structure and management," Mr Najib said in a statement released on Thursday afternoon by the Prime Minister's Office. "We will study and act on the report’s recommendations. We must ensure that lessons are learned, and action will be taken if any evidence of wrongdoing is found."

He added: "The PAC’s report shows that 42 billion ringgit (US$10.8 billion) is not missing from 1MDB, as had been alleged by (former Prime Minister) Mahathir.

"It is now clear that Mr Mahathir’s allegations against 1MDB have been false. He was motivated by personal interest, not the national interest, and a desire to unseat the government."

Former Prime Minster Mahathir Mohamad has been a vocal critic of Nr Najib, calling for the latter to step down over his role in the 1MDB saga. 

1MDB BOARD OFFERS RESIGNATION

On Thursday afternoon, the board of 1MDB offered its resignation to the Ministry of Finance. "This has been a difficult decision to take but we believe is the right thing to do, given the circumstances, in order to facilitate any follow-up investigations as recommended by the PAC," it said in a statement.   

- CNA/Agencies/rw

Posted 07 Apr 2016 11:07 Updated 07 Apr 2016 21:26

European Parliament resolution of 17 December 2015 on Malaysia

The European Parliament,

–  having regard to its previous resolutions on Malaysia,

–  having regard to its resolution of 15 January 2014 on the future of EU-ASEAN relations(1) ,

–  having regard to the Statement by the EEAS Spokesperson of 15 April 2015 on the recently adopted amendment to the Sedition Act in Malaysia,

–  having regard to the Statement by the EEAS Spokesperson of 17 March 2015 on the arrest of Nurul Izzah, opposition Member of Parliament in Malaysia,

–  having regard to the Statement by the EEAS Spokesperson of 10 February 2015 on the conviction of Malaysian opposition politician Anwar Ibrahim,

–  having regard to the EU Strategic Framework on Human Rights,

–  having regard to the Statement by the UN High Commissioner for Human Rights of 9 April 2015 on draft anti-terror and sedition laws,

–  having regard to the joint press release by the EEAS on the EU-ASEAN policy dialogue on human rights of 23 October 2015,

–  having regard to the EU Guidelines on Human Rights Defenders,

–  having regard to UN Universal Periodic Review session of October 2013,

–  having regard to the report of the Special Rapporteur on trafficking in persons of June 2015,

–  having regard to the second Universal Periodic Review of Malaysia before the UN Human Rights Council, and its recommendations, of October 2013,

–  having regard to the Universal Declaration of Human Rights of 1948,

–  having regard to the United Nations Declaration on Human Rights Defenders of 1998,

–  having regard to the International Covenant on Civil and Political Rights (ICCPR) of 1966,

–  having regard to the UN Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (CAT) of 1984,

–  having regard to the Association of Southeast Asian Nations Human Rights Declaration,

–  having regard to Rules 135(5) and 123(4) of its Rules of Procedure,

A.  whereas the EU regards Malaysia as a key political and economic partner in South-East Asia; whereas the EU and Malaysia are negotiating a Partnership and Cooperation Agreement and a Free Trade Agreement;

B.  whereas the space for public debate and free speech in Malaysia is rapidly narrowing as the government resorts to vaguely worded criminal laws to silence its critics and quell public discontent and peaceful expression, including debates on matters of public interest; whereas these laws include the Sedition Act, the Printing Presses and Publications Act, the Communications and Multimedia Act and the Peaceful Assembly act, amongst others;

C.  whereas on 3 December 2015 the National Security Council Bill was passed in the Malaysian Parliament by a majority vote; whereas the bill grants the National Security Council led by the Prime Minister sweeping powers to declare a state of emergency in any area deemed a security risk, giving broad powers of arrest, search and seizure without warrant;

D.  whereas under the Sedition Act alone at least 78 people have been investigated or charged since the beginning of 2014;

E.  whereas former opposition leader Anwar Ibrahim was sentenced on charges of sodomy in February 2015 following a politically motivated prosecution which resulted in criminal proceedings that failed to meet international standards of fair trial; whereas he has been denied appropriate medical care;

F.  whereas LGBTI people in Malaysia are criminalised under the country’s anti-sodomy law and regional laws prohibiting cross-dressing, and face political hate speech, arbitrary arrest, physical and sexual assault, imprisonment, and other abuses;

G.  whereas Malaysian cartoonist Zulkiflee Anwar Ulhaque (Zunar) is facing charges under the Sedition Act following critical tweets against the government with regard to the sentencing of Anwar Ibrahim; whereas blogger Khalid Ismath and academic Azmi Sharom face similar charges;

H.  whereas the Malaysian Anti-Corruption Commission has questioned the Prime Minister in connection with graft allegations after the discovery of over 600 million euros in his bank account without any justification of source and purpose, as well as on separate allegations that hundreds of millions of euros were missing from deals involving a state firm he launched, 1Malaysia Development Berhad (1MDB);

I.  whereas media outlets and publishing houses have faced restrictions under the Printing Presses and Publications Act following reporting about these allegations, and whereas lawyer Matthias Chang and politician Khairuddin Abu Hassan were arrested following their investigations into these allegations;

J.  whereas the High Representative raised concerns regarding the abusive use of criminal laws during her visit to Malaysia on 5-6 August 2015;

K.  whereas, according to the UN and NGOs, the Malaysian police forces have increasingly resorted to acts of torture, late night arrests, unjustifiable remands and selective prosecution;

L.  whereas Malaysia continues to practice the death penalty with up to 1 000 prisoners currently on death row;

M.  whereas Malaysia is a Member of the UN Security Council and the current ASEAN Chair, and the 27th ASEAN Summit was held in Kuala Lumpur from 18 to 22 November 2015;

1.  Reaffirms the EU’s strong commitment to the Malaysian people with whom the EU has strong and longstanding political, economic and cultural ties;

2.  Deplores the deteriorating human rights situation in Malaysia and in particular the crackdown on civil society activists, academics, media and political activists; expresses concern with regard to the spike in the number of people facing charges or arrest under the Sedition Act;

3.  Is particularly concerned about the adoption of the National Security Council Bill and urges its withdrawal; calls on the government to maintain a proper balance between the need to safeguard national security and the imperative to protect civil and political rights;

4.  Urges the Malaysian Government to immediately release all political prisoners, including former opposition leader Anwar Ibrahim, and to provide them with appropriate medical care, and to drop politically motivated charges, including those against cartoonist Zulkiflee Anwar Haque (Zunar), blogger Khalid Ismath, academic Azmi Sharom, political dissidents Khairuddin Abu Hassan and Matthias Chang, and human rights activists Lena Hendry and Maria Chin Abdullah;

5.  Urges the Malaysian authorities to repeal the Sedition Act and to bring all legislation, including the Prevention of Terrorism Act, the Printing Presses and Publications Act, the Communications and Multimedia Act, the Peaceful Assembly Act, and other relevant provisions of the penal code, in line with international standards on freedom of expression and assembly and the protection of human rights; calls on the Malaysian authorities to facilitate peaceful assemblies, and to guarantee the safety of all participants and their freedom of expression across the whole country;

6.  Urges the establishment of the Independent Police Complaints and Misconduct Commission (IPCMC), as recommended by the Police Commission of Inquiry in 2005, to investigate allegations of torture and deaths in police custody;

7.  Underlines the importance of independent and transparent investigations into the graft allegations, and of full cooperation with the investigators; urges the Malaysian Government to refrain from putting pressure on the Malaysian Anti-Corruption Commission and media;

8.  Deeply deplores the rise of supremacist groups which contribute further to the creation of ethnic tensions;

9.  Encourages the Malaysian Government to open a dialogue with opposition parties and civil society stakeholders;

10.  Calls on the Malaysian Government to ratify key international human rights conventions, including the ICCPR, the ICESCR, the CAT, the ICERD, ILO Convention 169, the ICC Rome Statute, as well as the 1951 Convention Relating to the Status of Refugees and its optional protocol;

11.  Asks the Malaysian Government to extend a standing invitation to all the UN Special Procedures, thereby enabling special rapporteurs to visit Malaysia without asking for an invitation;

12.  Reiterates its position that the death penalty is a cruel, inhumane and degrading treatment, and calls on Malaysia to introduce a moratorium as the first step towards the abolition of the death penalty for all offences and to commute all death sentences to prison terms;

13.  Calls on the EU and its Member States to coordinate policies towards Malaysia, in line with the EU Strategic Framework on Human Rights, in order to encourage reform on the above issues of concern through all possible means, including in the context of the UN where Malaysia is a non-permanent member of the Security Council in 2015-2016;

14.  Urges the EU Delegation to Malaysia to step up efforts to finance projects on freedom of expression and reforming repressive laws, and to use all appropriate tools, including the European Instrument for Democracy and Human Rights, to protect human rights defenders; urges the withdrawal of the anti-sodomy law and calls on the EEAS, in line with the EU guidelines on the protection and promotion of the rights of LGBTI persons, to step up its work on the rights of LGBTI people in Malaysia who face violence and persecution, and to aim in particular towards the decriminalisation of homosexuality and transgenderism;

15.  Reaffirms the importance of the EU-ASEAN policy dialogue on human rights as a useful tool to exchange good practices and promote capacity-building initiatives;

16.  Calls on the Commission to make sure that human rights concerns are duly taken into account during future negotiations on an EU-Malaysia FTA and PCA;

17.  Instructs its President to forward this resolution to the Council, the Commission, the Vice-President of the Commission/High Representative for Foreign Affairs and Security Policy, the parliaments and governments of the Member States, the parliament and government of Malaysia, the United Nations High Commissioner for Human Rights and the governments of the ASEAN Member States.

Link: http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P8-TA-2015-0465+0+DOC+XML+V0//EN&language=EN

Related reports:

Heed EU’s call for independent probe into 1MDB, RM2.6 billion donation, says DAP 
http://www.themalaysianinsider.com/malaysia/article/heed-eus-call-for-independent-probe-into-1mdb-rm2.6-billion-donation-says-d


European Parliament's resolution unfortunate, says Foreign Affairs Ministry

http://www.thestar.com.my/news/nation/2015/12/20/european-parliament-resolution-unfortunate-foreign-affairs/

Respect our sovereignty, M’sia tell European Parliament

http://www.freemalaysiatoday.com/category/nation/2015/12/21/respect-our-sovereignty-msia-tell-european-parliament/

1MDB: scandal-hit Malaysia fund seals China deal for power assets

By Michael Peel in Bangkok. Published by Financial Times on 24 November 2015.

Malaysia’s scandal-hit 1MDB state investment fund has clinched a deal to sell power assets to one of China’s fast-expanding state nuclear companies for $2.3bn. The agreement with China General Nuclear Power Group helps cut the Malaysian fund’s big debt pile but hands over a keystone of sovereign-backed 1MDB’s activities to a Chinese state buyer.

It is the latest twist for the state investment fund, where the fate of billions of dollars borrowed as it ran up more than $11bn of debts from contentious deal making has sent ripples reverberating from Malaysia to the Middle East to the Cayman Islands.

The higher than expected price also raises the question of whether the deal is in part a reminder by Beijing of its influence in Malaysia, after President Barack Obama’s efforts last week to woo Najib Razak, the country’s premier, as an ally on US-China maritime disputes.

While beating expectations, the 9.83bn ringgit pricetag represents a steep discount on the roughly 12bn ringgit that 1MDB has said it paid for the assets over the past few years, although attached power purchase agreements, are closer to expiry and so less valuable. Foreign buyers also benefit from the steep fall in the value of the currency, which has tumbled by about a fifth in the past year against the dollar.

CGN’s main local rival bidder was Tenaga Nasional, the state-owned electricity company, and the auction process attracted companies from Saudi Arabia and Qatar. Shares in Tenaga rose 5 per cent early on Tuesday, apparently in relief that the company would not be used by the government to bail out 1MDB.

But the sale to CGN creates complications of its own, given how factions of the ruling United Malays National Organisation have stoked hostility towards the country’s Chinese Malaysian business elite. The deal also appears to over-ride rules that limit foreign investors to minority stakes in the Malaysian power production industry without a special waiver. 

James Chin, director of the Asia Institute at Australia’s Tasmania university, said there could yet be a backlash against CGN if electricity users ended up paying more. “It will become a racial issue if there is a power [price] hike to benefit the new operators,” Mr Chin said.

Arul Kanda, the former Abu Dhabi-based banker brought in earlier this year to restructure 1MDB, said CGN was the “clear winner” of an auction he hailed as a “vote of confidence in the Malaysian economy”.

Malaysia has been under growing economic pressure because of a mix of international energy price falls, high consumer debt levels and concerns about the fallout from 1MDB’s troubles.

Both the price and the politics of the CGN deal are now likely to come under greater scrutiny, at a time when the Najib government is under severe pressure over its stewardship of 1MDB. The premier has for months been fighting off a campaign to oust him over mysterious payments of almost $700m to his personal bank account. He denies wrongdoing and says the money was from an unnamed Middle Eastern donor.

CGN’s 1MDB deal was revealed after Mr Najib held talks on Monday with Li Keqiang, his Chinese counterpart. Mr Li announced Beijing would both buy more Malaysian government bonds and offer Kuala Lumpur the chance to purchase almost $8bn of Chinese debt and shares.

The 1MDB deal is part of a broader overseas expansion by CGN, including a high-profile push in the UK. CGN’s rival China National Nuclear Corp agreed a deal last week to build two nuclear power plants in Argentina.

Link: http://www.ft.com/cms/s/0/2f8a2b1e-9274-11e5-9e3e-eb48769cecab.html?ftcamp=published_links%2Frss%2Fasiapacific%2Ffeed%2F%2Fproduct#axzz3sOgbYepM

Malaysia under fire for 'human rights clampdown' ahead of Barack Obama visit

By Philip Sherwell, Asia Editor. Published by The Telegraph on 19 November 2015.

Malaysia has intensified a crackdown on free speech and dissent ahead of Barack Obama’s arrival on Friday for a high-profile summit, campaigners have said. The daughter of a jailed opposition leader and human rights activists have called on Mr Obama to raise the country’s human rights record with his host.

Najib Razak, the embattled prime minister, may have hoped for some respite from his domestic political woes and a deepening financial controversy during the summit with the US president and other Asian leaders. But domestic activists and international campaigners have maintained the focus on Malaysian’s human rights crackdown as Mr Obama arrives on Friday for the meeting between the Association of South East Nations (ASEAN) and the US.

Mr Najib’s government has reportedly used criminal defamation and sedition laws to prosecute activists, journalists and opposition leaders in the run-up to the ASEAN summit in an attempt to quell dissent. The crackdown has been chronicled in scathing reports released recently by Human Rights Watch and Amnesty International.

This month, a United Nations working group concluded that Anwar Ibrahim, the jailed former deputy prime minister, was being held in violation of international law and called for his immediate release. Mr Anwar has been named a prisoner of conscience by Amnesty and his case described as a “travesty of justice” by Human Rights Watch. 

Mr Anwar’s daughter, Nurul Izzah, an MP and deputy leader of his People's Justice Party, urged Mr Obama to use his visit to highlight Malaysia’s rapidly deteriorating human rights situation. “The forthcoming ASEAN-US summit is an opportunity for President Obama to ask much more of Prime Minister Najib Razak's administration and lead the global community in confronting the government's violations of human rights,” she wrote in US News & World Report. “And he must call publicly for my father's release and that of other political prisoners.”

Phil Robertson, deputy Asia director of Human Rights Watch, said that Malaysia was now “on a human rights precipice” and that “in no other country in ASEAN has the human rights situation fallen so far and so fast over the past two years”. He urged Mr Obama to tell his host that “his accelerating human rights crackdown on political opponents and civil society activists must stop, and make it clear that failure to do so will affect bilateral relations with the US.”

It is the second time in recent months that critics have used a high-profile international summit hosted by Malaysia to focus on Mr Najib. In September, the prime minister backed out of giving the welcome address to the world’s leading anti-corruption gathering organised by Transparency International. It had recently emerged that Mr Najib had received payments into his personal bank accounts of nearly $700 million from an unnamed Middle Eastern benefactor. The prime minister has denied any wrongdoing or personal benefit and his aides have insisted that the money was channelled through Mr Najib’s accounts as a political donation to help his party fight the 2013 elections.

Mr Najib was already facing searing criticism for his role in the scandal of the 1MDB state investment fund, which has wracked up debts of $11 billion since he set it up in 2009. He currently heads the fund’s advisory board. It was during an investigation by Malaysian officials into alleged corruption at 1MDB that the payments into Mr Najib’s bank accounts were revealed. His aides’ explanation of the provenance of the funds has done little to dim the controversy. His government has reacted by launching a wide-ranging crackdown on critical voices. It has charged two opposition members of parliament, an opposition activist, and two rally organisers with criminal offences for exercising their free speech rights and raided the offices of two online news portals reporting on corruption investigations.

The timing is awkward for Mr Obama as he again faces a series of hurdles in his goal of pursuing a US foreign policy “pivot” to Asia. He will arrive from the Asia-Pacific Economic Co-operation (APEC) summit in Manila where the gathering was overshadowed by the Paris terror attacks, Sino-US tensions over the South China Seas and a lively debate about the “hottest” leader pitching Canada’s Justin Trudea against Enrique Pena Nieto of Mexico.

And Mr Obama has wooed Mr Najib as a regional ally in his campaign to secure support for the trans-Pacific trade deal – an initiative that he hopes will be a major foreign policy achievement his final years in office. The Malaysian leader was even invited to play golf with Mr Obama last December during his annual Christmas holiday in Hawaii. But in September, it was revealed that US federal investigators were examining claims of 1MDB corruption. It has just emerged that the web of international investments by the scandal-plagued 1MDB fund has stretched to include a former leading Obama fundraiser, an ex-White House official and a hip-hop superstar.

1MDB paid private-equity group DuSable Capital Management $69 million to buy its stake in a joint venture to develop solar power plants in Malaysia, the Wall Street Journal reported. DuSable was founded in 2013 by Frank White, a former Democratic Party fundraiser, Shomik Dutta, a former special assistant at the White House, Pras Michel, one of the original members of the band the Fugees.

There are no allegations of wrongdoing but the deal has raised questions in Malaysia about links between the state fund that is close to Mr Razak and well-connected US figures.

Link here: http://www.telegraph.co.uk/news/worldnews/asia/malaysia/12004884/Malaysia-under-fire-for-human-rights-clampdown-ahead-of-Barack-Obama-visit.html

Malaysia Fund 1MDB’s Missing Money Problem Grows

By BRADLEY HOPE and TOM WRIGHT. Updated Sept. 18, 2015 7:59 p.m. ET published by WSJ.

Questions about a troubled Malaysian state investment fund and missing money in the Middle East have widened to include nearly $1 billion more.

The Wall Street Journal reported last week that officials in Abu Dhabi were trying to understand why a $1.4 billion transfer that the fund, 1Malaysia Development Bhd., said it made to a counterparty in the Middle Eastern emirate wasn’t received. Now, those officials are questioning a further $993 million that 1MDB reported it paid to the Abu Dhabi fund, the International Petroleum Investment Co., but which also appears to be largely missing, people familiar with the matter said.

Officials at IPIC didn’t respond to requests for comment. Officials at 1MDB didn’t respond to requests for comment before this article was published online, but afterward said the source and purpose of the payments were clear: to settle the termination of some options that had been issued to IPIC.

The questions deepen the mystery around 1MDB, which was set up by Malaysian Prime Minister Najib Razak in 2009 to invest in Malaysia’s economy. The fund is struggling to repay more than $11 billion in debt and is at the center of a corruption scandal that is destabilizing Mr. Najib’s government.

Earlier this year, a Malaysian government investigation found almost $700 million entered the prime minister’s private accounts through entities linked to 1MDB ahead of a close election in 2013. The source of the money is unclear, and the government investigation hasn’t detailed what happened to the funds that went into Mr. Najib’s personal accounts. Malaysia’s anticorruption body in August said the funds were a donation from the Middle East. The donor wasn’t specified.

Attempts to reach Mr. Najib weren’t successful. He has denied any wrongdoing or taking money for personal gain.

The link to the Abu Dhabi fund came in 2012, when it agreed to guarantee $3.5 billion in bonds issued by 1MDB to fund the purchase of some power plants. In return, IPIC was given options to buy a stake in those power assets. But last year, both sides agreed to end that deal with 1MDB agreeing to buy back the options for an undisclosed price.

1MDB said it made a transfer of nearly $1 billion to an IPIC subsidiary in November as partial payment for the options, according to a copy of a draft report by Malaysia’s auditor general that was reviewed by The Wall Street Journal.

Neither the financial records of IPIC, nor its wholly owned subsidiary Aabar Investments PJSC, for 2014 mention receipt of the money. They say only in a footnote that as of the end of 2014, 1MDB owed IPIC $481.3 million in outstanding payments for the options. No substantial amount of money was received by IPIC, the people familiar with the matter said. It isn’t clear how IPIC arrived at the $481.3 million figure and how it relates to the nearly $1 billion transfer 1MDB says it made to IPIC.

In its statement after this article was posted online, 1MDB said it can’t comment on the accounting treatment by the Abu Dhabi fund or its subsidiaries. It also said the matter of the options has been resolved.

“1MDB can confirm that pursuant to the payment made by 1MDB, the options were in fact terminated,” the fund said in a statement.

The missing $1 billion is the second payment that 1MDB reported it made and IPIC said it didn’t receive. Financial statements from 1MDB and a report by the Malaysian auditor general, which is one of a number of agencies investigating 1MDB, show that the fund made a separate payment of $1.4 billion to IPIC. That payment was described as collateral for the loan guarantees that Abu Dhabi provided on the bonds issued by 1MDB. Last week, the Journal reported that payment also was missing and that Abu Dhabi officials were looking into it, according to people familiar with the matter.

The 1MDB fund said last week that it stood by its audited financial accounts and that its auditor, Deloitte Touche Tohmatsu Ltd., had made “specific and detailed” inquiries into the collateral transfer before signing off on the accounts. Deloitte declined to comment.

On Aug. 14, the Swiss attorney general’s office opened criminal proceedings against two unidentified executives of 1MDB and against what it called persons unknown for suspected corruption and money laundering. It also has frozen tens of millions of dollars in Swiss bank accounts. Swiss authorities on Tuesday said Malaysia has agreed to allow its prosecutors to question witnesses.

Read more here:
http://www.wsj.com/articles/malaysia-fund-1mdbs-missing-money-problem-grows-1442547656

1Malaysian Development Berhad has condemned as "wrong, poorly sourced, sensationalist and malicious" the latest article by the Wall Street Journal concerning 1MDB.

The article related to "nearly US$1.0 billion" of payments which WSJ said was made by 1MDB for termination of certain options.

The state-owned fund said: "Given the severity of the unproven allegations, the malicious insinuations made and the impact on the 1MDB rationalisation plan, we would have expected at the very least that the Wall Street Journal would have the decency and courage to name its source and/or provide proof."

"This inability to substantiate clearly shows the shallow nature of its assertions and casts serious doubt on whether or not the Wall Street Journal editors themselves believe in the weak story, cobbled together by its reporters."

Read more here:
http://www.bernama.com/bernama/v8/ge/newsgeneral.php?id=1172641#.VfwkjJC12dg.twitter

A former senior member of Malaysia's ruling party said authorities prevented him from boarding a flight on Friday bound for New York, where he planned to lodge a complaint with police against indebted state investor 1Malaysia Development Bhd (1MDB).

Khairuddin Abu Hassan has already lodged complaints in Switzerland and Hong Kong regarding banking activity involving 1MDB, which has been linked to various individuals under investigation in Switzerland for suspected corruption.

Khairuddin said on his official Facebook page that immigration officials prevented him from leaving on orders from Malaysian police, who later asked him to report to Kuala Lumpur's police headquarters at 11 a.m. (0300 GMT) on Monday.

Read more here:
http://www.reuters.com/article/2015/09/19/us-malaysia-1mdb-idUSKCN0RJ05I20150919?feedType=RSS&feedName=worldNews

Najib defends #RedShirt’ rally, says not seditious or racist

Prime Minister Datuk Seri Najib Razak said even though several illegal rallies had been held before this to challenge the dignity of the Malays, they were patient. “But the Bersih 4 rally was considered the turning point when several participants went beyond the limit by stomping on the picture of national leaders and insulting the country's leadership,” he said at the National Silat Federation (Pesaka) Silat Assembly 2015 at Dataran Merdeka in Kuala Lumpur yesterday. Speaking before 15,000 members of Pesaka from all over the country, Najib said: "Slapped once, we did not do anything. The second time... nothing... the third time... nothing... but the fourth time had crossed the limit. Malays also have rights. The Malays will stand up when their pride is scarred, when their leader is insulted, condemned and humiliated. It's enough, do not repeat such vengeful acts"...He said the assembly of silat exponents tonight showed they were prepared to defend the nation's dignity from being humiliated. In his speech, Najib also reminded that the government could not be changed through street demonstrations.

Read more here: http://www.themalaysianinsider.com/malaysia/article/najib-defends-red-shirt-rally-says-nothing-seditious-or-racist?utm_source=dlvr.it&utm_medium=twitter

"BAPA mertua saya juga ditipu, dikatakan ada rombongan ke Putrajaya, tapi sampai di Kuala Lumpur, disuruh pakai baju merah dan ikut perarakan dari Masjid Negara," kata Qystina dipetik laporan OhBulan. Demikian luahan seorang netizen termasuk beberapa lagi pelayar laman sosial mendakwa ibu, bapa atau saudara mereka ditipu untuk sertai himpunan tersebut.

"Lain kali tolong jujur. Beritahu cerita sebenar. Bukan menipu orang tua, cakap untuk kehadiran sambutan Hari Malaysia," kata Rie di Facebook.

Berita selanjutnya di sini: http://www.sinarharian.com.my/semasa/netizen-bapa-mertua-ditipu-sertai-baju-merah-1.431976

Malaysian riot police on Wednesday fired water cannon on ethnic Malay protesters staging a pro-government rally in the capital Kuala Lumpur that has raised racial tensions in the multi-ethnic country.

Police briefly sprayed demonstrators who were chanting slogans denouncing Malaysia’s Chinese minority and demanding access to a tourist street lined with ethnic Chinese-run businesses, witnesses said.

At least several thousand members of the Muslim ethnic Malay majority marched through the heart of the capital to declare support for Prime Minister Najib Razak, a Malay who is facing calls to step down over a financial scandal.

Shadowed by heavy security, the demonstrators also claimed that long-held Malay dominance of the country was being challenged by the Chinese.
Read more here: http://www.scmp.com/news/asia/southeast-asia/article/1858708/najibs-red-shirt-army-warned-malaysian-government-avoid

Related links: http://www.todayonline.com/world/asia/police-fire-water-cannons-red-shirt-rally-crowd-petaling-street
http://www.channelnewsasia.com/news/asiapacific/water-cannon-fired-at-red/2129858.html?cid=twtcna
http://www.thestar.com.my/News/Nation/2015/09/17/Red-shirt-Bill/

#Bersih4