Malaysia "sliding towards autocracy amid sovereign wealth scandal"

17 Feb 16

Transparency International’s Asia Pacific regional director has said the organisation is gravely concerned Malaysia is moving rapidly towards autocracy.


Transparency International’s Asia Pacific regional director has said the organisation is gravely concerned Malaysia is moving rapidly towards autocracy.

Srirak Plipat voiced fears in a statement on Monday that power is going unchecked in the Southeast Asian country, where the government is clamping down on whistleblowers and working to curb investigations into up to $4bn missing from Malaysia’s sovereign wealth fund  – 1Malaysia Development Berhad (1MDB)  – and other state-owned companies.

Plipat used his statement to call for swift investigations into the scandal and greater protection for whistleblowers, timed to coincide with the attendance of Malaysia’s prime minister Najib Adbul Razak at the summit between the US and the Association of Southeast Asian Nations, which opened in California earlier this week.

“We need the international community to come together to ensure that Malaysia responds to the ongoing investigations into the misappropriation of government funds and does not try to cover up any wrongdoing,” he said.

Plipat added that proposals by the country’s attorney-general Mohamed Apandi to amend the Official Secrets Act 1972 to charge whistleblowers and journalists who refuse to reveal their sources are concerning. Other decisions by Apandi also cast doubt on the impartiality of Malaysia’s judiciary, he claimed.

Last year, prime minister Najib replaced the previous attorney general who had been critical of the government, suspended the 1MDB taskforce investigating the alleged corruption and arrested or transferred investigators at the Malaysian Anti-Corruption Commission.

Attorney general Apandi swiftly closed an investigation into how $680m was deposited into prime minister Najib’s private accounts from Saudi Arabia and cleared Najib of criminal offences or corruption.

Najib denied any wrongdoing or reception of funds for personal gain and said the transfer was a gift from Saudi Arabia’s royal family for his election campaign. The prime minister is reported to have returned $620m of the funds that were not utilised.

However on Monday Singapore, through which the $680m in payments to Najib were allegedly transferred, said its probe into the 1MDB case had led it to seize a large number of bank accounts over possible money laundering offences.

Investigators also suspect the $680m was linked to 1MDB, which drew attention when it emerged that the fund had amassed $11bn in debt after it repeatedly defaulted on loans.

Authorities in the US, Hong Kong and Switzerland have all opened investigations into the 1MDB scandal, suspecting corruption, misappropriation of public funds, money laundering and bribery.

As well as being linked to the 1MDB scandal, Najib oversaw the creation of 1MDB from a predecessor regional investment fund, chairs 1MDB’s advisory board and heads the ministry of finance, 1MDB’s sole shareholder. 

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