Mahathir Mohamad calls for foreign interference in Malaysia
Malaysia’s longest serving prime minister Mahathir Mohamad has called for “foreign interference” to help oust his corruption-tainted former protege, Najib Razak, and questioned Canberra’s silence over the multi-billion-dollar 1MDB scandal that has drawn in one of Australia’s biggest banks.
The Australian
The comments mark an extraordinary about-face for the famously nationalistic 91-year-old, memorably branded a “recalcitrant” by former prime minister Paul Keating for boycotting the inaugural 1993 APEC summit because he favoured an Asian caucus that excluded foreign (caucasian) nations.
In an interview with The Weekend Australian at his office in Putrajaya, the federal administrative capital he conceived, Dr Mahathir said there was little hope the Malaysian Prime Minister at the centre of the scandal would step down without outside pressure.
“Normally I don’t like foreign interference in Malaysian affairs but our avenues for redress have been closed completely (both within the party and through draconian laws now used to intimidate critics),” he said.
“So now we have to allow foreign interference in our domestic affairs. If it is legal, legitimate, yes. If they have information, they should give information. And if there is money laundering, just because it is Najib it doesn’t mean they should suspend that law.”
Dr Mahathir is spearheading a grand coalition of Malaysian opposition forces devoted to ousting Mr Najib, including dissident members of Mr Najib’s ruling United Malays Nationalist Organisation, which the former strongman once ruled with an iron fist.
He quit UMNO last month after failing to pull off a putsch from within party ranks, and has since joined an extraordinary alignment of former political enemies, including his former deputy prime minister, Anwar Ibrahim, first jailed during Dr Mahathir’s tenure on a politically motivated sodomy conviction and again last year.
Authorities in the US, Switzerland, Luxembourg, Singapore and Hong Kong are all conducting probes into aspects of the 1MDB scandal, which Swiss investigators estimate could involve the misappropriation of more than $US4 billion from 1MDB.
Dr Mahathir said he was surprised Australian authorities had not launched their own inquiry, given the ANZ Bank owned an almost 25 per cent stake of AmBank, the Malaysian institution at the centre of the global financial scandal
“The Australian government doesn’t seem to want to annoy the Malaysian Prime Minister,” he told The Weekend Australian.
“The (Australian) media has exposed a lot of things but the government is strangely very, very quiet. I suppose if you have personal relations with someone, until you are provoked, you are going to leave it up to other people.”
Relations between Australia and Malaysia have improved markedly since the Keating era, with Labor and Coalition governments lauding Mr Najib as a dependable ally and his country as a moderate Islamic bulwark against Islamic terrorism.
But Dr Mahathir said: “People are asking why ANZ, a big shareholder in AmBank, has not reported anything and not responded to any inquiry. I think the government should at least tell the ANZ Bank to explain why it is that they have not (taken action) because there are elements of money laundering in this case. And money laundering is of course a serious crime now.
“The Australian government should want to know what ANZ knows about this deposit in a bank in which ANZ has a big share.”
Through its majority stake in AmBank, the Malaysian bank also at the centre of the alleged $US681 million Saudi gift to Mr Najib, ANZ holds three permanent board positions and may appoint its own people to key AmBank management positions.
Its 2006 partnership agreement obliges AmBank to follow ANZ rules of probity and policy, and consult ANZ on all major business decisions.
In a speech this week highlighting the scourge of international money laundering, Switzerland’s financial regulator FINMA held up the 1MDB example as a clear case of corruption, and pointed to the “inadequate” anti-money laundering measures employed by the banks involved.
The Weekend Australian has since learned of a separate $450m deal in 2010, involving many of the same players as the 1MDB saga, which raises yet more serious questions over AmBank’s customer-vetting processes and whether money was siphoned off from 1MDB to buy out well-connected shareholders in Malaysian investment bank UBG.
ANZ insists it had no power to act over any money laundering or exchange breaches, including the transfer into Mr Najib’s personal accounts of more than $US1bn from Malaysian government agencies and foreign entities believed linked to 1MDB, some of which triggered anti-money laundering alerts within AmBank.
ANZ deputy chief executive Graham Hodges told a Senate hearing this week that allegations the bank had questions to answer over the 1MDB scandal were “simplistic”.
“We do not control that bank,” Mr Hodges said. “We are directors on that bank, it is a separately listed public company.”
There is no suggestion of wrongdoing among ANZ staff with roles at AmBank.
Dr Mahathir has questioned that defence. “If ANZ finds crime being committed by a bank in which it has a big share, it’s bound to ask, ‘why has this happened?’. Ask for more details,” he said.
“Currently, as far as I know, ANZ has not done anything to help expose the wrongdoers, and it’s no small sum.”
While every player involved in the 1MDB scandal has denied wrongdoing — including Mr Najib, who was cleared by his own Attorney-General — foreign investigators are inching closer to unravelling the complex financial arrangements which they believe cloaked the siphoning of billions of dollars from a fund intended to build wealth for future Malaysian generations.
On Thursday, a Malaysian parliamentary public accounts committee report into 1MDB found $US5.5bn of claimed cash and assets could not be accounted for, and that the debt accumulated by the fund amounted to $US14bn.
The report did not draw links between 1MDB management irresponsibility and Mr Najib, who chairs the 1MDB advisory board, but noted that its investigations had been hamstrung by 1MDB’s refusal to hand over foreign bank statements that would likely have shed light on Mr Najib’s $US681m Saudi “gift” and other multi-million-dollar transfers.
Among the committee’s key findings was that $US4.5bn in unauthorised payments had gone to companies of questionable ownership including $US1bn from an earlier 1MDB joint venture with PetroSaudi, a company once co-owned by a Saudi royal.
Another $US3.5bn in unauthorised payments is said to have gone to offshore companies investigators now believe were established by executives involved in a legitimate joint venture with Abu Dhabi-based Aabar Investments PJS.
