Worries about 1MDB bailout helped push down ringgit, says Financial Times


(Malay Mail Online) – The controversy linking Prime Minister Datuk Seri Najib Razak to 1Malaysia Development Bhd (1MDB) funds demonstrates the need to reform Umno before its practices endanger the whole country, the Financial Times said today.

In the third opinion piece on the topic by a foreign media outlet today, the London-based business weekly said the prime minister must also not dismiss the claims that he allegedly received US$700 million (RM2.6 billion) from the firm as “political sabotage”.

“The Malaysian government should understand why such transparency is needed. The economy may have performed well in 2014, with 6 per cent growth. But foreigners own about 40 per cent of Malaysia’s public debt. Worries the government may have to bail out 1MDB are preying on these investors and helped to push the ringgit to a 16-year low against the dollar this week.

“In the meantime, Umno’s leadership needs to contemplate Malaysia’s future more broadly. The party’s six decade-long rule appears to have inculcated in its leaders a sense that they are somehow both indispensable to and indivisible from the state.

“Both the imprisonment of Mr Anwar and the apparent stalling over 1MDB give the impression of a party that denies the possibility of losing power. Umno should change course before it steers Malaysia into dangerous waters,” the FT said, referring to jailed opposition leader Datuk Seri Anwar Ibrahim.

The FT editorial piece is the third of the day on the growing controversy surrounding 1MDB and claims it funnelled funds into Najib’s private bank accounts, demonstrating the global attention on the unfolding saga.

Editors at Bloomberg today said the scandal demonstrated a need for Malaysia to abandon the existing of political patronage over which Umno holds dominion.

The Business Times in Singapore, in its opinion piece, said Najib owed a duty to Malaysians to proactively disprove the claim made against him, rather than waiting for a special taskforce investigating 1MDB to clear his name.

In a report last Friday, the Wall Street Journal claimed that a money trail showed that US$700 million was moved between government agencies, banks and companies before it ended up in Najib’s personal accounts.

A special taskforce comprising the Attorney-General’s Chambers, Bank Negara Malaysia, the Royal Malaysian Police and the Malaysian Anti-Corruption Commission are investigating 1MDB and the claim made by the WSJ.

The high-powered investigation this week froze six bank accounts and seized 17 documents over the alleged money trail, but later said that none of these were linked to Najib.

Najib has denied taking funds from 1MDB for “personal gain” and his lawyers have since asked the WSJ to state if the newspaper is accusing the prime minister of misappropriating funds.