Former Malaysian PM faces new charge of money laundering

Malaysia's former prime minister Najib Razak walks out of a courtroom in Kuala Lumpur. (Reuters)

Former Malaysian Prime Minister Najib Razak will face a new charge of money laundering on Wednesday over a multibillion-dollar graft scandal at a state investment fund, the anti-corruption agency said.

Najib in July pleaded not guilty to abuse of power and three counts of criminal breach of trust, just two months after the scandal led to his stunning election defeat.

The charges are related to the transfer of 42 million ringgit ($10.3 million) into his bank accounts from SRC International, a former unit of the 1MDB fund that U.S. investigators say was looted of billions by Najib’s associates. Each charge has a maximum penalty of 20 years in prison.

The agency summoned Najib for further questioning Tuesday. It said in a statement later that Najib will also be charged Wednesday under the anti-money laundering act over the SRC case. It didn’t elaborate.

Najib set up 1MDB when he took power in 2009, but the fund amassed billions in debts and is being investigated in the U.S. and several other countries. Anger over the 1MDB saga led to the defeat of Najib’s long-ruling coalition in May 9 polls and ushered in the first change of power since independence from Britain in 1957.

The new government reopened investigations into 1MDB that were stifled under Najib’s rule and barred Najib and his wife from leaving the country. Police have also seized jewelry and valuables valued at more than 1.1 billion ringgit ($270.2 million) from properties linked to Najib.

Najib, 64, has accused Malaysia’s new government of seeking “political vengeance” and vowed to clear his name in his trial.

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