KUALA LUMPUR, May 24 — Tun Dr Mahathir Mohamad today accused Putrajaya of a cover-up over 1Malaysia Development Bhd’s (1MDB) US$1.103 billion (RM3.91 billion) “redeemed” from the Cayman Islands after it revealed the amount was in assets and not cash.

The former prime minister said the Finance Ministry’s confirmation that the sum was in assets directly contradicted Prime Minister Datuk Seri Najib Razak’s previous parliamentary reply that 1MDB’s funds were brought back from the Cayman Islands and parked in Singapore’s BSI Bank.

He also insisted that Bank Negara Malaysia would have been informed by Singaporean authorities of the fact that the amount was not in the form of US dollars as had been asserted.

“The ‘cover-up’ act or the act of hiding offences committed in government transactions is legally wrong,” Dr Mahathir wrote in a blog post, citing Section 218 of the Penal Code.

Section 218 imposes a punishment of a maximum jail term of three years, or a fine, or both for public servants who prepare records that they know to be incorrect, knowing that doing so will cause losses to the public or do so with the intent to escape legal punishment.

“There is a criminal element in this case that requires a police investigation and if this money cannot be traced, then legal action must be taken against all the parties involved,” the elder statesman added.

Dr Mahathir also pointed out that BSI Bank has dismissed the documents given by 1MDB, which purportedly show the assets of 1MDB subsidiary Brazen Sky Limited, as false bank statements, as reported by Sarawak Report last month.

“Clearly, Najib’s second written parliamentary reply that what was kept was documents is not true either. BSI Bank has reported to the Monetary Authority of Singapore that it’s not keeping 1MDB’s money,” he said.

The country’s longest-serving prime minister said the claims made by Najib, government officials, Bank Negara and 1MDB that cash had been brought back from the Cayman Islands and kept in Singapore’s BSI Bank, as well as the clarification to the first parliamentary reply that it was documents and not cash that were brought back, were untrue.

“Those who made these false reports have broken the Section 218 criminal law,” said Dr Mahathir.

“This is a very serious matter. As much as RM7 billion that a state-owned company had borrowed with a government guarantee is now missing and there have been attempts to lie to Parliament and to the state in connection to it,” he added.

Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said Thursday that the 1MDB’s US$1.103 billion redeemed from had been mistakenly described as “cash” instead of just assets.

He told reporters that the redemption, now parked in Singapore’s BSI Bank, is in the form of “units” and not US dollars as previously claimed by 1MDB CEO Arul Kanda Kandasamy.

1MDB, which is facing a huge debt burden of RM42 billion, is currently being investigated by the Auditor-General and Parliament’s Public Accounts Committee.