1MDB should be prosecuted, says Malaysia Central Bank

The 1 Malaysia Development Berhad (1MDB) logo is seen on a billboard at the funds flagship Tun Razak Exchange under-development site in Kuala Lumpur on 3 July 2015 Image copyright AFP

Malaysia's Central Bank has recommended criminal prosecutions in connection with the controversial state investment fund 1MDB.

The bank said the fund, which was set up by Malaysian Prime Minister Najib Razak, had invested nearly $1.83bn abroad without using proper procedures.

It wants the money brought back to Malaysia.

There has been a series of sensational revelations about 1MDB that have threatened Mr Najib's position.

Documents leaked in July indicated that Mr Najib received some $700m in his private accounts from entities linked to the fund. Mr Najib denies doing anything wrong. He says the money was a donation from the Middle East.

The fund has debts of 42bn ringgit ($11.5bn) and is the subject of several investigations by different authorities, including the Central Bank.

The bank's statement comes just a day after the country's attorney general, appointed to look into the matter by the prime minister, said he had seen a report of the central bank's investigation and judged that 1MDB officials had not committed any offence.

The central bank said 1MDB had gained permits for investment abroad, but these were based on inaccurate or incomplete disclosure of information.

The political scandal has drawn in the former prime minister, Mahathir Mohamad. He alleged that ruling party leaders accepted bribes and the police should take action.

Dr Mahathir and the Bersih pro-democracy movement have called for Mr Najib to resign over corruption allegations.

Tens of thousands of Malaysians have attended rallies across the country.

What is 1MDB?

  • The 1Malaysia Development Berhad state investment fund was established under Prime Minister Najib Razak in 2009 to transform Malaysia into a high-income economy.
  • Critics say the fund overpaid for many of its investments and spent millions on fees to investment bank Goldman Sachs
  • It began attracting attention at the end of 2014 when it started missing payments to creditors. It later emerged that the fund was mired in $11bn (£7bn) of debt
  • Mr Najib has been accused of taking $700m (£455m) from the fund - a charge which he has denied
  • Malaysia anti-corruption commission said it had verified that the money was a donation from unnamed foreign donors.

Read more: 1MDB, the case that's riveting Malaysia.

Why Malaysians are disillusioned with Najib Razak

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