Malaysia's attorney general defends govt over fund scandal

AP News
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Posted: Oct 08, 2015 7:11 AM

KUALA LUMPUR, Malaysia (AP) — Malaysia's attorney general on Thursday defended the government over a debt scandal as the country's state rulers pushed for the investigation to be resolved quickly.

The Conference of Rulers, which comprised nine state rulers and governors of four other states, issued a rare statement Tuesday saying that failure to give convincing answers and clarifications on state investment fund 1MDB have led to a "crisis of confidence" in the country. They called for a quick and transparent investigation into the fund.

The fund, set up by Prime Minister Najib Razak in 2009 to develop new industries, has been accused by critics of graft and mismanagement after it accumulated at least 42 billion ringgit ($10 billion) in debt.

The Attorney-General's Chambers said it studied the central bank's investigation report into 1MDB and found no wrongdoing by fund officials. It said the central bank last week requested a review of its decision but the request was rejected as no new evidence was provided.

Separate investigations by the police and the anti-corruption agency were not yet completed as statements of some key witnesses have not been recorded, it said in a statement.

"The investigations conducted by the relevant agencies were never at any time haltered or hindered," it added.

The Malay rulers have warned that the 1MDB crisis could jeopardize Malaysia's economy if it was prolonged. They said the 1MDB issue has been seen as a key reason for the recent sharp plunge of the ringgit, which last month fell to a 17-year low of more than 4 ringgit to the dollar.

In a strongly worded statement, the state rulers said government leaders must put the people's concern above their personal interests and ensure that justice is meted out transparently based on law.

It is highly unusual for Malaysia's traditional state rulers to criticize the government. They play a largely ceremonial role and do not participate in actual governance of their states.

The 1MDB crisis landed Najib in hot water especially after documents leaked in July showed he received some $700 million in his private accounts from entities linked to the fund.

Najib, who has denied any wrongdoing, later said the money was a donation from the Middle East. He fired a deputy who was critical of him, four other Cabinet members and the then-attorney general investigating him.