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New Malaysian government to investigate suspicious money trail

Member: Nifa

The Malaysian government is to investigate a £1.6 billion deal to transfer the ownership of Battersea Power Station between Malaysian investors, amid fears that the funds of ‘ordinary’ Malaysians were used to invest in it.

The leader of Malaysia’s newly elected Pakatan Harapan coalition government, Anwar Ibrahim, has called for an investigation into a series of deals paid for with Malaysian sovereign funds, in the hope that they can be renegotiated if there has been any wrongdoing.

In January 2018, a Malaysian state fund agreed to buy a direct stake from other Malaysian shareholders in Battersea Power Station, which will be the home to Apple’s new UK headquarters and a number of high-end residential properties.

Mr Ibrahim alleges that the previous government, which was in power while he was imprisoned for opposing the regime, used the “savings of ordinary people” to cover up a multi-billion-dollar embezzlement scandal at 1MDB – a state investment fund.

He has indicated that any deal considered ‘dubious’, including investment in housing in London, will have to be investigated to confirm that the investment decisions made were without political influence and came from bona fide sources.

Mr Ibrahim’s government claims that more than £3 billion ($4 billion) had been stolen from a government fund, with an alleged $681 million (£513 million) ending up in the bank account of the previous government’s leader, Razak Najib.

There have also been a series of raids on properties linked to Mr Najib, in which luxury branded handbags, watches and jewellery were taken along with bags of cash.

Mr Ibrahim has lashed out at the British authorities for failing to investigate the source of the cash used to buy the properties and is believed to be seeking support from the UK government to investigate the matter.

He pointed out that in Singapore people had gone to prison for their role in laundering 1MDB cash.

If a forensic accounting investigation does ensue, which is likely, it will entail following the money trail of each investment so that the true provenance of the cash is discovered.

Roger Isaacs, Partner at Milsted Langdon, said: “If an investigation does go ahead, it is likely that bank accounts, communications, witnesses and governing bodies will be scrutinised to discover the source of the funds. This is a complex, cross-border investigation which is likely to continue for many months.”

Author: Roger Isaacs 18 June 2018

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