July 4, 2015 / 11:29 AM / 2 years ago

No let-up for Malaysia's PM after state fund graft allegations

Malaysia's Prime Minister Najib Razak arrives to break fast at Saujana Menteri Besar in Malaysia's southern state of Johor July 3, 2015.Edgar Su

KUALA LUMPUR (Reuters) - Malaysian Prime Minister Najib Razak came under fresh pressure on Saturday after statements from colleagues opened up the prospect of further probes into alleged corruption around the debt-laden state fund 1MDB.

The attorney-general said he had received several documents from a task force investigating 1MDB, including some connected to allegations that money was transferred into an account in Najib's name, and advised it to take further action.

Najib's deputy, meanwhile, said that authorities must immediately follow up a Wall Street Journal report published on Friday that said investigators had traced nearly $700 million to bank accounts they believed belonged to the prime minister.

Reuters could not independently verify the report.

"These allegations are serious because they can affect the credibility and integrity of Najib as PM and the leader of the government," Deputy Prime Minister Muhyiddin Yassin said in a statement.

Najib has denied taking any money from the state fund or any other entity for personal gain. In a statement on Friday he accused former premier Mahathir Mohamad, an ally-turned-critic, of fanning allegations he described as a lie.

1MDB, whose advisory board is chaired by Najib, has debt of nearly $11.6 billion. It faces separate investigations by the central bank, auditor general, police and the parliament's Public Accounts Committee.

Attorney-General Abdul Gani Patail said in a statement that a task force made up of members of the anti-corruption commission, police and central bank gave him documents on 1MDB "for me to check ... including documents connected to allegations that money was transferred into the account of the prime minister."

He said the task force had raided offices of three companies linked to the state investor but gave no further details about the nature or contents of the documents and did not specify what further action he had advised the task force to take.

"UNSUBSTANTIATED" ALLEGATIONS

The Wall Street Journal, citing documents from a government probe, said there were five deposits into Najib's account.

It said the two largest transactions, worth $620 million and $61 million, were made through a chain of companies linked to 1MDB during an election campaign in March 2013.

1MDB has described the allegations as "unsubstantiated", saying it never provided funds to the prime minister.

Najib, the son of a former prime minister, was already on the defensive before Friday's report over relentless accusations of graft and mismanagement from the opposition and even from within his own party.

Now in his second term, he has also been under pressure over his management of the economy and a scandal over the murder of a Mongolian model nine years ago.

He says he had nothing to do with the murder of Altantuya Shaariibuu, and two officers who were part of Najib's security detail at the time were found guilty of her murder.

However, Najib retains support within the long-ruling Barisan Nasional coalition and from within his party, the United Malays National Organisation (UMNO).

Apparently closing ranks behind the prime minister, several senior members of UMNO made supportive statements on Saturday.

"To me, every accusation must have proof ... if there are accusations without evidence, we must regard them as defamation," UMNO Supreme Council member Ismail Sabri Yaakob told reporters, according to state news agency Bernama.

Additional reporting by Al-Zaquan Amer Hamzah; Writing by John Chalmers; Editing by Ruth Pitchford

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