August 12, 2015 / 5:58 AM / 2 years ago

Malaysia opposition party files suit against PM, state fund 1MDB

Malaysia's Prime Minister Najib Razak is pictured during the 19th Annual Leaders Consultation at Nurul Iman Palace in Bandar Seri Begawan, Brunei, August 11, 2015.Ahim Rani

KUALA LUMPUR (Reuters) - A Malaysian opposition party on Wednesday filed a civil suit against Prime Minister Najib Razak and indebted state fund 1Malaysia Development Berhad (1MDB), saying they had violated electoral rules and a new election should be held.

1MDB, whose advisory board is chaired by Najib, and which has debts of more than $11 billion, is under investigation for graft and financial mismanagement. The affair has triggered a political crisis for Najib.

The Wall Street Journal reported in July that investigators looking into 1MDB found that nearly $700 million was deposited into Najib's accounts. Reuters has not verified the report.

Najib has denied taking any money for personal gain, saying the allegations are part of a malicious campaign to force him from office. 1MDB has denied transferring funds to Najib and an interim government report found nothing suspicious.

Last week, the national anti-graft agency said the funds in Najib's account were donations from the Middle East, and not from 1MDB.

Jailed opposition leader Anwar Ibrahim's People Justice Party (PKR) said the donation of 2.6 billion ringgit ($645 million), the movement of funds and dealings involving 1MDB and its affiliates were linked to an election campaign in 2013.

"The fact is that the alleged amount spent by Najib far exceeds the allowable amount for elections," said Nurul Izzah Anwar, the party's vice president and Anwar's daughter.

"This is a clear-cut breach of the election law," she told Reuters.

Spokesmen for 1MDB and the government did not immediately respond to requests for comment.

The PKR said the $645 million amount was more than 26 times the permissible amount allowed under the electoral law.

The party, according to a copy of its suit seen by Reuters, wants the judiciary to declare that Najib and 1MDB had acted illegally and the ruling National Front coalition should be de-registered and a fresh election called.

The suit names Najib, 1MDB, the Election Commission and the secretary general of the Najib's United Malays National Organisation's (UMNO), the dominant party in the coalition.

Anwar, a former finance minister and deputy prime minister, was jailed in February for five years for sodomizing a former male aide.

He denies the charge, calling the case a conspiracy by Najib's government to cripple the opposition.

Reporting by Trinna Leong; Editing by Clarence Fernandez, Robert Birsel

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