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1MDB: Malaysia 'will co-operate' with US fraud investigation 1MDB: Malaysian PM under pressure over $1bn US fraud case
(about 1 hour later)
PM Najib Razak's office has said Malaysia will "fully co-operate" with any investigation into state fund 1MDB after the US said it "defrauded" Malaysians. Malaysian PM Najib Razak is facing pressure internationally and at home amid US allegations of massive fraud at state investment fund 1MDB.
US authorities moved Wednesday to seize more than $1bn (£761m) in assets from the fund set up by Mr Najib. The fund was set up by Mr Najib in 2009 with the stated aim of boosting the Malaysian economy.
Mr Najib is not named but "Malaysia official 1" is identifiable as someone whose account allegedly received funds. But US Attorney General Loretta Lynch said evidence showed it had defrauded Malaysians "on an enormous scale".
This is a major development in a case that has gripped the region. On Wednesday, US authorities moved to seize more than $1bn (£761m) in assets related to the fund.
Mr Najib was officially cleared of criminality by the country's attorney general earlier this year. He has always denied any wrongdoing. Mr Najib is not named in the papers and has consistently denied wrongdoing.
There is no allegation that Mr Najib spent any of the money but people close to him are accused of using billions of dollars to buy jewellery, art and luxury properties; pay gambling expenses; and hire musicians and celebrities to attend parties. But he is identifiable as "Malaysian Official 1", whose account allegedly received millions in funds originating from 1MDB.
The $1bn the US hopes to seize would make up only a proportion of the more than $3.5bn (£2.6bn) allegedly diverted.
1MDB: The case that's riveting Malaysia1MDB: The case that's riveting Malaysia
The US v Wolf of Wall Street: Karishma Vaswani, Asia Business correspondent The US v The Wolf of Wall Street
Going through the 136 page court filing from the US Department of Justice, which has filed a civil lawsuit against the makers of the Wolf of Wall Street, you wouldn't be blamed for thinking you were reading the script for a sequel. Singapore seizes $177m as part of Malaysia corruption probe
The allegations are damning. What is 1MDB?
The US Attorney General Loretta Lynch says that the "Malaysian people were defrauded on a monumental scale". What are the US accusations?
The lawsuits allege that public money stolen from Malaysian state fund 1MDB - which was set up by the Prime Minister Najib Razak in 2009 - was used to buy a laundry list of expensive properties, and even finance the Wolf of Wall Street movie.
Read more from Karishma
'Money laundered through US accounts'
A spokesperson for Mr Najib said the government would "fully co-operate 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."
The court papers, filed in Los Angeles, allege that misappropriated 1MDB money was laundered through accounts in the US.
The US justice department alleges the money financed lavish lifestyles of "multiple individuals including public officials".
If successful, the US justice department intends to seize assets including property in the US, UK and Switzerland.
Singapore fraud investigators said on Thursday they had seized more than $175m in assets connected to 1MDB and found several major banks, including Standard Chartered, had showed "weaknesses in the processes for accepting clients and monitoring transactions".
What does the US allege the money was spent on?What does the US allege the money was spent on?
Source: US Department of JusticeSource: US Department of Justice
The $1bn would only make up a proportion of the money that was allegedly diverted, which comes to more than $3.5bn (£2.6bn). Mr Najib was officially cleared of criminality by the Malaysian attorney general earlier this year. He had dismissed the previous attorney general after he repeatedly criticised the prime minister's handling of the case.
Mr Najib's stepson, Riza Aziz- who produced the Leonardo DiCaprio film The Wolf of Wall Street - is named in the court papers, as are a Malaysian financier and two Abu Dhabi government officials. The current attorney general, Mohamed Apandi, said on Thursday that there was no evidence funds were misappropriated from 1MDB.
The fund started to attract attention in early 2015 when it missed payments for the $11bn it owed to banks and bondholders. The prime minister is now facing renewed calls to answer the accusations and stand down.
The Wall Street Journal (WSJ) reported it had seen a paper trail that allegedly traced close to $700m from the troubled fund to Mr Najib's personal bank accounts. Former premier and long-time Najib foe Mahathir Mohamad said there "can be no doubt" that Mr Najib was responsible for 1MDB's finances.
1MDB said in a statement last year that it had never given money to the prime minister and called the claims "unsubstantiated". It has repeatedly stated that the company has assets worth more than its debts. He said Malaysians should stage street protests against Mr Najib, as they have in the past, and push for a referendum on his leadership.
Parliamentary opposition leader Wan Azizah Wan Ismail said he should go on leave "so as not to create the perception of abuse of power" or hinder this "very important" investigation".
A spokesperson for Mr Najib said the government would "fully co-operate 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."
Analysis: Karishma Vaswani, Asia Business correspondent
When I spoke to the fund's CEO, Arul Kanda, in October last year, he told me "the value of assets outweigh the value of debt."
But 1MDB had to sell some of its most prized assets in order to realise this value, and as one Malaysian opposition leader put it to me at the time, any business that has to do that isn't a successful business.
1MDB's financial mismanagement and the allegations of misconduct by the prime minister has raised concern amongst the foreign investment community that Malaysia's economy is in for a rough ride.
But there are bigger worries than just the financial performance of 1MDB. At the heart of it is the suggestion that Malaysia's public money has been stolen and used for personal gain.
Read more from Karishma
1MDB said in a statement last year that it had never given money to the prime minister and called the claims "unsubstantiated".
Meanwhile Singapore fraud investigators said on Thursday they had seized more than $175m in assets connected to 1MDB and found several major banks, including Standard Chartered, had showed "weaknesses in the processes for accepting clients and monitoring transactions".