1MDB: Malaysia's global corruption scandal
3 July 2018
The long-running scandal surrounding Malaysia's state development fund 1MDB has gripped the country for years, leading to arrests and multi-million dollar asset seizures. In the latest twist, the country's new government has reopened investigations into the controversial fund - a move that could put a former prime minister in jail. The 1 Malaysia Development Berhad (1MDB) fund was set up in 2009 to turn Kuala Lumpur into a financial hub and boost the economy through strategic investments. It started to attract negative attention in early 2015 after it missed payments due for some of the $11bn (PS8.3bn) it owed to banks and bondholders. The fund was then accused of money laundering and channelling hundreds of millions of dollars into private pockets to acquire assets globally, including yachts, paintings, jewellery and real estate. The US Department of Justice (DOJ) began investigating 1MDB, saying $4.5bn had been diverted. The fund is also being investigated by several other countries. The country's former prime minister Najib Razak was accused of pocketing nearly $700m (PS520m) from the fund, which he himself had set up. Mr Najib has always denied the allegations and was cleared of wrongdoing by Malaysian authorities when he was in power. But claims of corruption at 1MDB were a major cause of Mr Najib's election loss to his former mentor Mahathir Mohamad in May, 2018. Soon after his win, Malaysia's new prime minister reopened the 1MDB investigations and vowed that Mr Najib "would face the consequences" if he was found to have broken any laws. Mr Najib was then barred from leaving the country and properties linked to him were raided. Police say they recovered $273m in luxury goods and cash, calling the seizure of valuables the biggest in Malaysian history. Then on 3 July, Mr Najib was arrested by anti-corruption authorities. US prosecutors had previously said a person described as "Malaysian Official 1" had received more than $1bn from 1MDB. That person is widely thought to be Mr Najib. Another target of the investigation is Malaysian businessman Low Taek Jho, who helped set up the fund, and is accused of diverting money to himself and his associates. He too has consistently denied any wrongdoing.
The country's former prime minister Najib Razak was accused of pocketing nearly $700m (PS520m) from the fund, which he himself had set up. Mr Najib has always denied the allegations and was cleared of wrongdoing by Malaysian authorities when he was in power. But claims of corruption at 1MDB were a major cause of Mr Najib's election loss to his former mentor Mahathir Mohamad in May, 2018.
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Why is it political?
Soon after his win, Malaysia's new prime minister reopened the 1MDB investigations and vowed that Mr Najib "would face the consequences" if he was found to have broken any laws. Mr Najib was then barred from leaving the country and properties linked to him were raided. Police say they recovered $273m in luxury goods and cash, calling the seizure of valuables the biggest in Malaysian history. Then on 3 July, Mr Najib was arrested by anti-corruption authorities. US prosecutors had previously said a person described as "Malaysian Official 1" had received more than $1bn from 1MDB. That person is widely thought to be Mr Najib. Another target of the investigation is Malaysian businessman Low Taek Jho, who helped set up the fund, and is accused of diverting money to himself and his associates. He too has consistently denied any wrongdoing.
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Will people go to prison?