KUALA LUMPUR, July 3 ― A Putrajaya spokesman has insisted to the Wall Street Journal (WSJ) that Datuk Seri Najib Razak has never exploited funds from 1Malaysia Development Berhad (1MDB) for personal use, after the international business paper confronted the government with claims that some US$700 million (RM2.6 billion) have been deposited into what is believed to be the prime minister's private accounts.
The daily, citing documents from Malaysian investigators currently scrutinising the troubled 1MDB's financials, claimed that the money trail shows that the cash was moved between government agencies, banks and companies before it ended up in Najib's accounts.
These documents, said WSJ, include bank transfer forms and flowcharts put together by investigators to shed light on 1MDB's cash flow. The paper said this is the first time a direct connection to Najib has been established in the probe on 1MDB.
“The prime minister has not taken any funds for personal use,” the daily quoted a Malaysian government spokesman as saying in response.
“The prime minister’s political opponents, unwilling to accept his record or the facts, continue to try to undermine him with baseless smears and rumours for pure political gain.”
The paper also spoke to a spokesman from 1MDB who claimed ignorance in the matter.
“1MDB is not aware of any such transactions, nor has it seen any documents to this effect,” the spokesman reportedly told WSJ.
The spokesman also pointed out to the daily that doctored documents have been used in the past to discredit Putrajaya and the Finance Ministry-owned 1MDB, referring to the email correspondence between PetroSaudi International (PSI) and 1MDB that were purportedly leaked to Sarawak Report by former PSI director Xavier Justo.
Justo is currently under the custody of Thai police.
According to WSJ, the original source of the funds is unclear and the investigation does not show what happened to the money after it was deposited into Najib's accounts.
Citing documents that it claimed to have viewed, WSJ said that investigators discovered five separate deposits from two sources that were made into Najib's accounts.
The largest two transactions, it said, were for US$621 million (RM2.3 billion) and US$61 million allegedly made in March 2013, shortly before the tumultuous Election 2013 in May.
“The cash came from a company registered in the British Virgin Islands via a Swiss bank owned by an Abu Dhabi state fund.
“The fund, International Petroleum Investment Co, or IPIC, has guaranteed billions of dollars of 1MDB’s bonds and in May injected US$1 billion in capital into the fund to help meet looming debt repayments,” WSJ reported.
The daily said, however, that it could not reach IPIC or the British Virgin Islands company, Tanore Finance Corp, for comment.
A further transfer of RM42 million, purportedly made into Najib's account at the end of 2014 and the beginning of 2015, is believed to have come from SRC International Sdn Bhd, a former subsidiary of 1MDB that was in 2012 parked under the Finance Ministry that Najib heads, WSJ said.
“The money moved through another company owned by SRC International and then to a company that works exclusively for 1MDB, and finally to Mr Najib’s personal accounts in three separate deposits, the government documents show,” the report said before adding that SRC director Nik Faisal Ariff Kamil has declined to comment on the matter.
According to WSJ, however, investigators said that one of the companies that the RM42 million passed through was Ihsan Perdana Sdn Bhd, a firm that provides corporate social responsibility programs for 1MDB's charity foundation.
“The Wall Street Journal examination of the use of funds tied to 1MDB for Mr. Najib’s election campaign showed that the money was slated to be used for corporate social responsibility programs as well,” the daily said.
1MDB is currently under probe for alleged impropriety by a number of agencies, including the Auditor-General's Department, the police and Bank Negara Malaysia.
An interim report on the A-G's probe will be submitted next Thursday to Parliament's Public Accounts Committee (PAC).