KL makes first arrest linked to 1MDB probe

KL makes first arrest linked to 1MDB probe
Construction company director Jerome Lee was remanded by a Putrajaya magistrate's court. According to the New Straits Times, the remanded man was a former 1MDB employee. Other news reports cited sources as saying he was involved with SRC International, once a 1MDB subsidiary.

The Malaysian authorities have remanded a director of a construction firm, in what is believed to be the first arrest in connection with a top-level multi-agency probe into scandal-hit state investor 1Malaysia Development Berhad (1MDB).

The Malaysian Anti-Corruption Commission (MACC) said in a statement yesterday that the man was picked up at the Kuala Lumpur International Airport on Monday "in relation to the investigation being carried out by the Special Task Force" made up of the MACC, police, public prosecutor and central bank.

Prominent lawyer Shafee Abdullah told The Straits Times that his client, Mr Jerome Lee, was picked up by MACC officers as he was about to leave for Taiwan on Monday morning.

"Today, the magistrate in Putrajaya has given a four-day remand but the court has not given me any grounds of arrest. This is breaching his basic rights," Mr Shafee said yesterday, but declined to say how his client was linked to 1MDB, merely describing him as a "businessman".

The task force has frozen bank accounts and also raided the headquarters of 1MDB since a July 3 allegation by The Wall Street Journal (WSJ) that US$700 million (S$960 million) linked to the debt- laden firm was deposited in private accounts belonging to Prime Minister Najib Razak.

Datuk Seri Najib has denied ever using state funds for "personal gains" but has not confirmed or denied if he received the money.

He had given the WSJ two weeks to clarify its allegations, a period that expired yesterday. Mr Najib would proceed now to sue, or issue a letter of demand, Malay daily Berita Harian reported.

According to the New Straits Times, the remanded man was a former 1MDB employee.

The Finance Ministry-owned 1MDB - which has racked up RM42 billion (S$15 billion) in debt in its first five years of operations - did not respond to queries from The Straits Times. However, it said in a statement that "no 1MDB employee is under remand".

Other news reports cited sources as saying the man, 39, was involved with SRC International, once a 1MDB subsidiary. SRC International was transferred into full ownership by the Finance Ministry in 2012.

According to the WSJ's July 3 article, RM42 million from SRC International eventually ended up in Mr Najib's personal accounts.

The Prime Minister has been facing growing calls to resign led by his influential predecessor, Tun Dr Mahathir Mohamad.

Criticism of Mr Najib's leadership has largely centred on claims of financial mismanagement of 1MDB.

Mr Najib has accused Dr Mahathir - who was Malaysia's leader for 22 years until 2003 - of conspiring with foreign media in a "political sabotage" to topple him via undemocratic means.

In recent weeks, the Prime Minister and allies in his ruling Barisan Nasional (BN) coalition have fought back and accused the likes of London-based website Sarawak Report of forging documents to raise criminal allegations against Mr Najib and 1MDB.

BN said a former Sarawak Report editor, Mr Lester Melanyi, had made video confessions of an opposition plot to publish tampered documents on Sarawak Report.

But a photo of a claimed forger, James Steward Stephen, in the videos turned out to be that of a rail worker instead, though Mr Melanyi said the photo was inserted by someone else and that the real forger exists.

Opposition lawmaker Tony Pua, a prominent critic of 1MDB, also said yesterday that his lawyers would demand that Mr Melanyi retract his claim that the MP was part of the claimed conspiracy.


This article was first published on July 22, 2015.
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