Malaysia anti-graft agents quiz ex-PM as government tots up ballooning debt

By Rozanna Latiff

KUALA LUMPUR (Reuters) - Former Malaysian premier Najib Razak completed his statement to anti-graft agents on Thursday, as the Southeast Asian country's new government revealed some $50 billion of liabilities adding to debt left behind by Najib's scandal-hit administration.

Defeated at the polls two weeks ago, Najib was summoned to explain suspicious transfers of $10.6 million into his bank account, just a fraction of billions of dollars that went missing from 1Malaysia Development Berhad (1MDB), a state fund that he had founded during almost a decade in power.

The new government led by 92-year-old Mahathir Mohamad has vowed to find out where the 1MDB money went and punish those responsible.

Najib has denied wrongdoing, though the new head of the Malaysian Anti-Corruption Commission (MACC) this week described how an investigation into 1MDB had been suppressed three years ago to stop charges being brought against him.

Najib, 64, appeared relaxed as he left the MACC headquarters some seven hours after arriving. Smiling, he put a finger to his lips to shush journalists so that he could speak.

"I have answered all questions as best as I could, And MACC has carried out their duties well and professionally," Najib said, almost exactly what he said after his first visit to the agency two days earlier.

He said the MACC had told him the "statement-session" was over.

Malaysians are now wondering if charges will be filed. The new government has barred Najib and his wife, Rosmah Mansor, from leaving the country.

WHISTLEBLOWER

While Najib was giving his statement, agents also met Xavier Justo, a Swiss national who was the first whistleblower in the 1MDB affair. Journalists saw Justo in the MACC lobby half an hour before Najib arrived.

Najib's statement relates to the transfers of 42 million ringgit ($10.6 million) into his bank account that investigators tracked back to SRC International, a former unit of 1MDB.

Mahathir met Justo on Sunday. It was documents leaked by the former director of energy group PetroSaudi International, which ran an energy joint venture with 1MDB from 2009 to 2012 that triggered investigations in at least six countries.

Mahathir quit as prime minister in 2003 after leading Malaysia for 22 years, but came out of retirement to join the opposition after becoming convinced that Najib, his former protege, was corrupt.

Investigators have searched Najib's home and several properties, seizing cash, jewellery and luxury items estimated to be worth millions of dollars.

The Star newspaper reported on Thursday that the cash found totalled 130 million ringgit (nearly $33 million).

FROM BAD TO WORSE

Mahathir has also accused Najib's government of understating the national debt and blamed it for abuses that have caused debt to balloon.

Finance Minister Lim Guan Eng said Najib's government had committed to making lease payments of 201.4 billion ringgit ($50.62 billion) for several projects that were designed to circumvent the federal government guarantee and debt limits.

The extra obligations brought Malaysia's total debt and liabilities to over 1.087 trillion ringgit as of Dec. 31, 2017, or 80.3 percent of gross domestic product, Lim told reporters.

Earlier this week, Lim said the Najib government had deceived the public and parliament over the country's finances and 1MDB. He also said treasury officials and the country's auditor general were unable to access certain accounts and reports.

In a late night Facebook post on Wednesday, Najib said Mahathir and his finance minister's "alarming and confusing" remarks about the country's debts and 1MDB liabilities "tell half the story".

"While you may want to slander and put all the blame on me to give a perception of a dire financial position to justify why you cannot deliver on your manifesto promises ... you must remember that the country and our people come first," he wrote.

(Additional reporting by Praveen Menon, Joseph Sipalan, and A. Ananthalakshmi; Writing by Simon Cameron-Moore; Editing by Nick Macfie)

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