Malaysia clears PM in scandal, says Saudis provided 'donation'

Yahoo – AFP, Dan Martin, January 26, 2016

Malaysian Prime Minister Najib Razak (front) smiles to photographers after
attending a parliament session in Kuala Lumpur, on January 26, 2016 (AFP
Photo/Mohd Rasfan)

The Saudi royal family was the source of a $681 million "donation" that has engulfed Malaysian Prime Minister Najib Razak in scandal, his attorney-general said on Tuesday, clearing the premier of graft allegations.

Mohamed Apandi Ali said a review of evidence compiled by the country's anti-graft agency showed that the money received in 2013 was a "personal donation from the Saudi royal family," giving no further information on the source.

He said $620 million was returned to the Saudis a few months later but did not say why.

Najib, 62, has for months denied accusations that the huge payments into his own bank accounts -- just before a hotly contested 2013 general election -- were syphoned from a now-struggling state-owned company he launched.

Until now, however, the precise origin of the funds has not been specified, other than vague claims by Najib's government that it came from unnamed Middle Eastern donors.

Malaysian Prime Minister Najib Razak has for months fended off accusations

 that a huge payment made into his personal bank accounts in 2013 was syphoned

off from a state-owned company he had launched (AFP Photo/Mohd Rasfan)

The money's purpose has never been revealed.

"No criminal offence has been committed by (the prime minster)", Apandi, who was installed by Najib shortly after the scandal broke last year, said in a statement.

He said he would instruct authorities to close this and related cases.

The fund transfers were revealed last July just as Najib was battling allegations that hundreds of millions of dollars were missing from deals involving the state-owned company, 1Malaysia Development Berhad (1MDB).

Najib said the attorney-general's finding "confirmed what I have maintained all along, that no crime was committed".

"This issue has been an unnecessary distraction for the country," he said in a statement, adding it was time for Malaysia to "unite and move on".

'Dark era'

But opposition figures swiftly denounced Tuesday's announcement, calling it part of a broader cover-up.

Malaysian PM Najib Razak (left) meets Saudi Interior Minister Mohammad

bin Naif in Jeddah, on June 7, 2015 (AFP Photo)

"This will cause people to ask whether the AG carried out his duty professionally, freely and fairly," opposition leader Wan Azizah Wan Ismail told reporters, according to The Malaysian Insider news site.

Apandi -- who has ties to Najib's ruling United Malays National Organisation (UMNO) -- came to office after Najib sacked the previous attorney general, who was believed to be aggressively investigating the matter.

"(Apandi) has to give an explanation to Malaysians. The AG has to do a lot of convincing," Wan Azizah said.

The "donation" alibi is widely dismissed by Malaysians, and even critics within the ruling party have demanded an independent probe and accused Najib of manipulating investigations.

Najib entered office in 2009 as a self-styled reformer but the scandal has severely battered his image, fuelling speculation that Malaysia's nearly six-decade-old ruling coalition could finally lose power in elections due by 2018.

Voters had already been increasingly rejecting the UMNO-dominated coalition in recent elections over recurring graft scandals, divisive racial politics and accusations of rights abuses.

The opposition and rights groups accuse Najib of responding with an escalating crackdown that has seen dozens of government opponents arrested on various charges and the introduction of tough new security laws.

In a report on the crackdown released Tuesday, Amnesty International said Malaysia "is spiralling into a dark era of repression".

Najib Razak (centre) inspects a guard of honour at the ruling United Malays

 National Organisation party's annual congress in Kuala Lumpur, on December 10,

2015 (AFP Photo/Mohd Rasfan)

Anti-graft campaign group Transparency International said two questions remained unanswered: "Where did it (the money) go and why was this personal donation made?"

Samantha Grant, the group's Southeast Asia coordinator, told AFP many critics saw the sacking of the former AG "as an abuse of power and an attempt by the Prime Minister to reinstate someone who was more sympathetic to his cause".

Najib still faces a potential threat from foreign investigations.

US authorities are reportedly looking into 1MDB-related overseas fund flows, while Swiss, British, Singaporean and Hong Kong authorities have acknowledged scrutinising the affair.

Early last year a New York Times investigative report detailed multi-million-dollar purchases of luxury US real estate by a close Najib family associate and alleged purchases of millions of dollars in jewellery for Najib's wife, Rosmah Mansor.

Najib has responded to the 1MDB scandal by purging powerful critics within UMNO. He retains a solid grip on the party and won its renewed endorsement at a party congress in December.