1MDB scandal cannot happen again: Tun Mahathir

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MALAYSIAN Prime Minister Tun Dr Mahathir Mohamad has vowed that a face-losing global scandal the magnitude of 1MDB will not be allowed to be repeated in Malaysia.

When asked if banking reforms were needed in response to the global corruption and money-laundering scandal, he said there were safeguards in the government that were designed to prevent such fraud.

However, he said these were circumvented by those now accused of defrauding the country of billions which has been described as the “worst corruption scandal ever in Malaysian history”.

Assuring that the loop-holes will be plugged, he said: “It will never happen again, we won’t allow that kind of operation, setting up a company to bypass the rules of the government as to the limit of borrowing.

“What Najib did was to set up a company which is not governed by government rules, and then borrowed RM42 billion and that was stolen; we don’t do that anymore,” he said during a press conference Sunday at the Perdana Leadership Foundation.

He reiterated that investigators have an “almost perfect case” against former leader Najib Razak, who will face charges of bribery, theft of government funds and embezzlement for his role in the scandal.

Explaining further, he said Najib was “totally responsible for 1MDB. Nothing can be done without his signature, and we have his signature on all the deals entered into by 1MDB. Therefore, he is responsible.”

For the record, Najib allegedly set up the 1MDB government fund in 2009 but it became entrenched in scandal in 2015 when it emerged that billions had been embezzled around the world, allegedly used by associates of Najib’s to fund spending sprees and yachts.

Some US$681m of the fund was alleged to have been transferred into Najib’s personal bank account and used to purchase jewellery for his wife Rosmah Mansor and pay their credit card bills.

Claiming the fund was set up to promote economic development. Najib, chaired its advisory board and, according to the US Justice Department, top executives and associates of Najib looted US$4.5bn from the fund between 2009 and 2014,
laundering it through the US, Singapore, Switzerland and other countries. Hundreds of millions landed in Najib’s bank account, though he denies any wrongdoing.

The US Justice Department is seeking to recover money from the fund it says was gambled in Las Vegas, used to buy hotels, apartments, a luxury yacht, a jet, diamond jewellery, art works and to finance Hollywood films including the Wolf of Wall Street and Dumb and Dumber To.

US prosecutors have alleged layers of foreign bank accounts and shell companies were used to launder the money and named Low Taek Jho, a friend of Najib’s stepson, as a key figure in the conspiracy. In one email he wrote, “looks like we may have hit a goldmine” after organising a 1MDB deal that would later allegedly become a money laundering vehicle.

Singapore has fined eight banks for failing to carry out proper anti-money laundering measures in relation to 1MDB and given prison sentences to several bankers.

While in office Najib fired those who tried to bring charges against him for 1MDB and then oversaw an investigation that cleared himself of all wrongdoing. During the election, the 1MDB chief executive officer Arul Kanda went on a campaign declaring that the fund was in good health.

The charges Najib will face in court are “embezzlement, stealing government money, losing government money and a number of other charges. Using government money to bribe. All those things,” said Mahathir, adding: “When we go to the courts, we will have clear evidence of the wrongdoing. We cannot afford to lose.”

More significantly, Mahathir has assured that a disgraceful global scandal the magnitude of 1MDB will not happen in Malaysia.