Malaysian Prime Minister Najib Razak is being investigated by the United States Justice Department over allegations of corruption, a news report said Tuesday.

Malaysian Prime Minister Najib Razak
Malaysian Prime Minister Najib Razak

The federal inquiry focuses on real estate dealings involving Najib’s stepson and a close family friend, the New York Times reported.

Najib has been criticized at home over an alleged $673-million transfer from the state development fund 1Malaysia Development Berhad (1MDB) into one of his personal bank accounts.

Najib claims the money came from unnamed donors.

The US federal grand jury investigation is reportedly looking into that issue as well, the report said.

The prime minister’s office declined to comment on the report.

Najib is scheduled to attend the UN General Assembly in New York this week.

“Are people going to shake hands with him?” jailed opposition leader Anwar Ibrahim wrote on Twitter.

The Wall Street Journal, also citing unnamed sources, reported that the US Federal Bureau of Investigation has opened an investigation into money-laundering allegations related to 1MDB.

Bank governor’s blunt remark

The head of the country’s central bank, which is investigating transactions involving the sovereign wealth fund, said the bank had submitted its findings to the Malaysian attorney general.

“Right now, we know that the public wants answers to these questions, and they deserve to get the answers,” said Bank Negara Malaysia governor Zeti Akhtar Aziz.

The ringgit – Asia’s worst performing currency of the year so far – is expected to start recovering once issues surrounding troubled state fund 1Malaysia Development Bhd (1MDB) are resolved, she said..

“They (the ongoing investigations) are going to yield an outcome,” Zeti said at an event in the capital city organised by government think tank Pemandu, according to The Malaysian Insider.

“We don’t need any more scandals or political uncertainty… When 1MDB is resolved, we will see a recovery in the currency,” she said.

Commenting on her remark, DAP secretary-general Lim Guan Eng said the troubled state investment firm must face up to the fact that they have caused the currency to drop, and not blame others.

Lim, who is also Penang chief minister, said: “This is a serious statement by the central bank governor, who is not an ordinary official. So open up, don’t hide anymore.

“1MDB must answer the RM42 billion debt it has accumulated to help restore the value of the ringgit. The prime minister, as the firm’s advisory board chairman, must advise 1MDB to answer,” he said in a press conference in Komtar Tuesday.

Najib has to file defense by Oct 1

Meanwhile, the Kuala Lumpur High Court gave Najib until Oct 1 to file his defence in a suit brought by sacked Umno member Anina Saaduddin over the 1MDB scandal.

Anina’s lawyer, Mohamed Haniff Khatri Abdullah, said the court also ordered Datuk Seri Najib, who is Umno president, to file affidavits in response to two applications, one of which is to freeze his assets pending the outcome of the main suit for alleged breach of trust.

“This has to be done by Oct 6,” Haniff told The Malaysian Insider adding that Anina can then respond by Oct 15.

Lawyers for Najib and party executive secretary Abdul Rauf Yusoh, who is also named in the main suit, later said they would file an application to strike out the suit against them.

Anina filed the suit on behalf of Umno on Aug 28 to demand that Najib account for the money. The action was taken despite the country’s anti-graft agency saying early last month that its investigations showed that the money was a political donation.

The Langkawi Umno division member was sacked early this month after she was found to have breached party rules by filing the suit.

Separately, she filed a suit to challenge her sacking from the party and a second one to freeze Najib’s assets to ensure that he cannot move his assets outside the jurisdiction of the court.

Three weeks ago, tens of thousands of anti-government demonstrators held an overnight vigil to demand Najib’s resignation over the corruption allegations, but he vowed to hold onto power until the next elections in 2017.

The ruling United Malays National Organization mobilized tens of thousands of ethnic Malays last week to show their continued support for the beleaguered leader.

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