What You Need To Know About Swiss Authorities Freezing Millions Of Dollars Linked To 1MDB

The state fund has been dogged by controversy over its USD11 billion debt and alleged financial mismanagement by PM Najib Razak.

After Switzerland's Office of the Attorney-General (OAG) opened criminal proceedings against Malaysia's troubled 1MDB last month, the Swiss authorities on Wednesday, 2 September, said they had frozen funds worth tens of millions of US dollars linked to Malaysia's state fund on suspicion of corruption and money-laundering. The OAG, however, declined to give any detail about the ongoing case.

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Both Swiss and Malaysian authorities are conducting inquiries concerning the fund, whose advisory board is chaired by Prime Minister Najib Abdul Razak. The fund has been dogged by controversy over its US$11 billion debt and alleged financial mismanagement.

“The Office of the Attorney General of Switzerland (OAG) has frozen assets amounting to several tens of millions of US dollars on Swiss bank accounts,” an OAG spokesperson said by email in response to an enquiry.

malaysiakini.com

According to Anna Wegelin, a spokeswoman for the OAG, the Swiss investigators are "analysing and consolidating the evidence"

“At this early stage of the procedure, the OAG is analysing and consolidating evidence. The OAG is already in contact with the Malaysian authorities. International cooperation with foreign countries, in particular with Malaysia, will probably be necessary to establish the facts,” she said.

The state fund, which was founded by PM Najib Razak, has amassed USD11 billion in debt it is struggling to repay, on top of which Najib himself has been accused of taking USD700 million linked to 1MDB.

Swiss financial regulator FINMA has also said it was checking with some Swiss banks on whether they have done business with 1MDB.

Meanwhile, 1MDB later released a statement saying "as far as 1MDB is aware, none of the company's bank accounts has been frozen"

“As far as 1MDB is aware, none of the company’s bank accounts have been frozen. 1MDB is in the process of developing a better understanding of the on-going investigations in Switzerland so the company can cooperate to its fullest extent.”

malaysiakini.com

Image via TMI

PM Najib had set up 1MDB back in 2009 with claims of strengthening Malaysian economic development, but the state fund has faced criticism for lack of transparency over its transactions

Reports that companies linked to 1MDB had transferred close to $700 million into bank accounts believed to be controlled by Mr. Najib have roiled Malaysian politics, leading to calls for him to resign from within his own party and outside it.

Mr. Najib has denied wrongdoing, and the government’s anticorruption commission has said the money was donated by Middle East interests, although it did not identify the source. No explanation has been given of how funds have been used.

nytimes.com

Meanwhile, José Ugaz, the chairman of Transparency International, a global anticorruption group, told a conference in KL on Tuesday, 1 September, that "there is a corruption crisis here", while observing that Najib had in recent weeks dismissed an AG and has taken action against newspapers reporting on the 1MDB issue. "These are not the actions of a government that is fighting corruption."

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