KUALA LUMPUR, Oct 9 — The Attorney-General’s repeated rejection of Bank Negara Malaysia’s recommendations for action against 1 Malaysia Development Bhd (1MDB) circumvents the rule of law, Tun Dr Mahathir Mohamad said today.

The former prime minister acknowledged that while it was the AG’s prerogative to decide what cases to prosecute, he should have allowed a court to judge the merits of the case given that BNM twice recommended prosecution for 1MDB’s alleged violation of financial laws.

He said this move was also vital as the Attorney-General did not specify why he chose to reject BNM’s recommendation both times.

“By dismissing this case, suspicions will remain in the minds of the people. In fact people are thinking that the decision of the AG may not be by the AG,” Dr Mahathir wrote in a blog post today.

He said the apparent bias was made more obvious by authorities’ readiness to employ anti-terrorism laws to detain critics of the state-owned investment firm.

Yesterday, the AGC revealed that it twice rejected BNM’s recommendations for action against 1MDB after finding no wrongdoing committed by any of the state-owned firm’s officials.

It added that news reports between September 12 and yesterday claiming BNM’s investigation papers are still in the AGC’s hands are “inaccurate and not true”.

In early June, Bank Negara announced that it had launched a formal inquiry on 1MDB’s activities to establish if there were any violations of the country’s financial rules and regulations.

BNM today responded to the AGC’s announcement by saying that it has taken its own action against 1MDB for breaching the Exchange Control Act 1953 (ECA), revoking three approvals given to the firm to invest US$1.83 billion (RM7.53 billion) abroad.