China denies offering to bail out 1MDB, Najib agrees

Frederick Owens
January 9, 2019

The 1MDB scandal erupted in 2015, and led to last year's electoral defeat of Najib Razak, ending his near decade-long stint as prime minister.

Chinese officials told visiting Malaysians that China would use its influence to try and get the United States and other countries to drop probes of allegations that allies of then-Prime Minister Najib Razak and others plundered the fund, according to the Journal.

This included surveilling WSJ reporters in Hong Kong who had been investigating 1MDB, the Journal reports, including by "full scale residence/office/device tapping, computer/phone/web data retrieval, and full operational surveillance." .

The Chinese Embassy in Malaysia yesterday said both China and Malaysia had all along treated each other as "friendly neighbours and honest partners".

Najib negotiator on the Chinese side offered accordingly, in 2016 the contract for the construction of Pipelines, Railways and other infrastructure projects in Malaysia, China wanted to achieve in the context of its new silk road.

In a statement in response to the Journal report, the Chinese embassy in Kuala Lumpur said China never attached political conditions to its cooperation with other countries.

The embassy denied such deals existed, saying China maintained a policy of non-interference in the affairs of another country.

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Malaysia's Finance Minister Lim Guan Eng told local media that he could not confirm the claims but would look into the matter. He pleaded not guilty and has consistently denied wrongdoing.

Malaysia's current government, which toppled Najib from power in a shock election victory last May, has halted billion-dollar projects backed by China.

The US Justice Department has estimated that a total of US$4.5 billion was misappropriated by high-level 1MDB fund officials and their associates between 2009 and 2014, including some of the funds that Goldman Sachs helped raise.

"But I have to refer back to see if there are details or thing explicitly said", he said. "If it was said in black and white, then it is something we will pursue".

The Najib administration was said to have inflated the value of the projects to divert money to 1MDB, which was struggling to pay its debts.

China has described a report accusing the Chinese government of trying to influence the investigation into the 1Malaysia Development Berhad (1MDB) scandal as being "groundless".

The WSJ report by Tom Wright and Bradley Hope - the authors of Billion Dollar Whale - had cited previously undisclosed minutes from meetings between Malaysian and Chinese officials as well as sources from the new Pakatan Harapan (PH) administration for China.

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