It all began when renowned US daily Wall Street Journal (WSJ) published an exclusive report claiming that up to US$700 million (RM2.6 billion) from the controversial 1MDB was transferred into PM Najib Razak's personal accounts in AmBank
A separate report from London-based whistleblower site Sarawak Report (SR) also alleged the same thing. Citing documents from the ongoing 1MDB investigation, WSJ and SR alleges that billions of ringgit was moved among government gencies, banks, and companies linked to 1MDB before ending up in Najib's personal accounts.
Najib has denied taking any money for personal gain and said the corruption allegations are part of a malicious campaign to force him out of office. He has also expressed his intent to sue WSJ for defamation.reuters.com
More than a week after the exposé was published, Singapore was unexpectedly drawn into the 1MDB saga when the Singapore Police Force (SPF) issued orders to freeze 2 local accounts linked to 1MDB for alleged money laundering offences on 15 July
“On 15 July 2015, we issued orders under the Criminal Procedure Code to prohibit any dealings in respect of money in two bank accounts that are relevant to the investigation,’’ the police said.
The SPF didn’t give details of the bank accounts it froze, saying it would be inappropriate as investigations continue.
It was the first time accounts outside Malaysia had been frozen in connection with an investigation into alleged financial mismanagement and graft at Malaysia's troubled state fund 1Malaysia Development Berhad (1MDB).reuters.com
The Singapore branch of the Swiss Falcon Private Bank, who has been implicated in the transfer of 1MDB funds in Najib's accounts, said it is co-operating with inquiries.
Meanwhile, the Monetary Authority of Singapore (MAS), the country's central bank, said that it is in contact with financial institutions related to the 1MDB investigation.
On Tuesday, the Monetary Authority of Singapore (MAS) said it was looking into whether banks followed rules on properly identifying customers and their sources of funds and on reporting suspicious transactions.
"We're actually looking back to see if they have done all these things," MAS managing director Ravi Menon told a news conference.
Global investment banking firm Goldman Sachs is said to have had a hard time winning over new clients in Malaysia due to its close relationship with 1MDB, according to a report the Asian Financial Review (AFR)
One rival banker told AFR the shunning of the investment bank was unofficial, but added: "if you're a Malaysian corporate, you're not going to use Goldman because you don't want this association."themalaysianinsider.com
Goldman played multiple roles for 1MDB, a report from Bloomberg claims, including acting as advisers in the purchases of energy assets Tanjong Energy, Genting Sanyen Power and Jimah Energy Ventures.
Between 2012 and 2013, Goldman arranged three bond sales for 1MDB, totalling US$6.5 billion. Fees, commissions, and expenses paid to Goldman totalled a whopping US$593 million, or 9.1% of the money raised. Goldman was also said to have earned US$283 million for arranging 1MDB’s US$3 billion bond sale in 2013, representing 9.4% of the amount raised.
The scandal has not only rattled investors, it has also brought the ringgit to its knees as the worst-performing Asian currency this year, having fallen to RM3.828 against the US dollar - a 16-year low - on 30 July
Malaysia’s ringgit dropped for a third month and reached a 16-year low as a political scandal linked to a state investment company weighed on investor sentiment already flagging from a slump in oil.
A multiple probe into the finances of debt-ridden 1Malaysia Development Bhd. spurred demand for the relative safety of government bonds, with a Bloomberg index of local securities rising for a seventh month.
The ringgit is Asia’s worst-performing currency this year and foreign-exchange reserves have declined to the lowest level since 2009 on suspected central bank intervention to stem the losses.
On the political front, American news magazine TIME highlighted 5 reasons why US President Barack Obama should disassociate himself from Najib after the cabinet reshuffle on 28 July, with the 1MDB scandal at the top of the list
The other four reasons listed are the imprisonment of opposition leader Datuk Seri Anwar Ibrahim, the push-and-pull of hudud implementation, Najib's purported link to Altantuyaa, and the replacement of the Internal Security Act (ISA) with the Prevention of Terrorism Act (POTA). Read the entire article here.
In his recent visit to Malaysia, British prime minister David Cameron became the first international leader to chastise Najib over allegations of corruption which could threaten to topple the government, and also challenged him over the treatment of Datuk Seri Anwar Ibrahim in prison
During a long, one-to-one meeting, Mr Cameron on Thursday urged Mr Najib to clean up his government.
After the one-to-one meeting, Mr Cameron is understood to have repeated the message to a wider gathering of Malaysian government figures in front of Mr Najib.
In a meeting at Najib’s residence, Cameron also urged his Malaysian counterpart to accept the importance of a free press, the need for ethics in business, and the fight against corruption. He stressed the importance of an open economy and open society.theguardian.com
With the fight against corruption being the key theme of his four-day visit in Southeast Asia, Cameron had delivered an address denouncing corruption as the "enemy of progress" that held back growth and fuelled al-Qaeda and migration in Singapore on Tuesday
“We have a strong relationship and that enables us to talk difficult issues. I want to raise some of the issues I raised in my speech earlier in the week, such as ethics in business and fighting corruption,” he is understood to have said.
“We should be working together for an open society and open economy.”
Investigations into 1MDB, which has been embroiled in controversy for months, have been put on hold indefinitely after members of the PAC were promoted to the cabinet: