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Malaysia's PM in the clear over £495m Saudi cash

Published 26/01/2016

Prime minister Najib Razak was under pressure to resign over the financial scandal (AP)
Prime minister Najib Razak was under pressure to resign over the financial scandal (AP)

Malaysia's prime minister has been cleared of criminal wrongdoing after the attorney general said nearly 700 million dollars (£493m) channelled into his private accounts was a personal donation from Saudi Arabia's royal family.

The announcement has ended months of uncertainty for Najib Razak, who has come under intense pressure to resign over the issue in his biggest political crisis since he took power in 2009.

But the announcement by attorney general Mohamed Apandi Ali did not clear up the mystery over the money as he did not say why the Saudi royals made the donation to Mr Najib, nor give any details on what the money was to be used for.

Mr Apandi said investigations by the country's anti-corruption agency showed that no criminal offence was committed as the 681 million dollars transferred into Mr Najib's accounts between March and April 2013 was "given without any consideration" by the Saudi royals as a personal donation.

He said Mr Najib returned 620 million dollars to the Saudis in August 2013 as it was not utilised. He did not say what happened to the remaining 61 million (£43m).

The anti-corruption agency met and recorded statements from witnesses, including the donor, he said.

"I am satisfied that there is no evidence to show that the donation was a form of gratification given corruptly," Mr Apandi said.

"Based on the evidence from witnesses and supporting documents submitted, I am satisfied that no criminal offence has been committed in relation to the said (681 million dollars) donation."

Mr Najib has been grappling with deep unhappiness over his leadership, with massive street rallies in August calling for his resignation, after documents leaked in July suggested that about 700 million dollars was deposited in his private bank accounts from entities linked to indebted state investment fund 1MDB.

He denied any wrongdoing and later said the money was a donation from the Middle East. Since then he has expelled critics in his government, sacked the then attorney general probing him and cracked down on the media that had helped keep him in power.

Opposition MP Tony Pua slammed Mr Apandi's decision, saying the fact it was a personal donation did not rule out corrupt motives or transactions.

Mr Pua said Mr Apandi provided no new or convincing information to support his decision.

The scandal started with investigations into 1MDB, which was set up in 2009 by Mr Najib to develop new industries. But it amassed £7 billion in debt after its energy ventures abroad faltered. Critics have long voiced concern over its massive debt and lack of transparency. Mr Najib still chairs its advisory board.

The political scandal partly contributed to the Malaysian currency plunging to a 17-year low last August.

Mr Apandi also cleared Mr Najib of corruption at government-owned SRC International, a firm linked to 1MDB, over another £7 million from SRC that was deposited into Mr Najib's account between December 2014 and February 2015.

He said there was no evidence to show Mr Najib was aware of the money transfer, nor that he had given his approval.

Mr Apandi said Mr Najib thought that all payment made from his accounts came from the donation by the Saudi royal family. No further details were available.

Support for Mr Najib's ruling coalition has eroded in the last two general elections. It won in 2013, but lost the popular vote for the first time to an opposition alliance.

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