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Malaysia in transition

Malaysia's Najib charged with 1MDB-linked money laundering

Former PM accused of taking $10.3m and faces potential 15-year jail term

Former Malaysian Prime Minister Najib Razak arrives in court in Kuala Lumpur on Aug. 8.   © Reuters

FUKUOKA, Japan -- Former Malaysian Prime Minister Najib Razak was indicted Wednesday on three charges of money laundering linked to the scandal at state fund 1Malaysia Development Berhad.

Najib, who was also charged with corruption in relation to the scandal last month, is alleged to have taken 42 million ringgit ($10.3 million) in three transactions between December 2014 and February 2015, according to a court statement. 

If convicted, Najib faces a maximum of 15 years in jail and a fine of no more than five times the amount allegedly taken under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act.

The charges brought by the Kuala Lumpur Sessions Court are related to SRC International, a unit of 1MDB, and come within the 100-day schedule new Prime Minister Mahathir Mohamad set for restoring confidence in institutions such as the anti-graft agency and the judiciary. 

In its election manifesto, Mahathir's Pakatan Harapan, or Alliance of Hope, promised to "redeem dignity," citing The Economist's Crony Capitalism Index, which ranked Malaysia second last in 2016 after Russia.

Since the May 9 election, the government has moved to replace the heads of public institutions who were seen as reluctant to investigate Najib's alleged ties to the multibillion dollar scandal.

As with the four charges in July, Najib pleaded not guilty to the money laundering charges on Wednesday.

Mahathir, currently on a four-day working visit to Fukuoka, told a group of high school students on Tuesday that he had had to re-enter politics to repair the "damage" caused by the previous government. 

"I am 93 years old now, but at least in one or two years, I might be able to do something," he said.

The government has also sought to reclaim the funds it believes were taken from 1MDB. Through diplomatic channels, it has regained possession of the luxury yacht Equanimity, which Mahathir claims was bought with money stolen from the fund. The vessel was seized by the Indonesian authorities and the government now plans to sell it to recuperate the money.

Analysts say the probe into the 1MDB scandal has received "wide" popular support. "It is piling charges to make sure Najib will be found guilty on at least one," said James Chin, a professor at the University of Tasmania.

Wednesday's charges are expected to deal a further blow to Najib's reputation. Although no longer the leader of the once-powerful United National Malays Organization, the former prime minister still plays an active role in opposition, regularly criticizing government policy. 

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