Malaysia probing if China offered to bail out 1MDB

Pedro Gonçalves
Malaysia probing if China offered to bail out 1MDB

Malaysia is looking into allegations that China offered to help bail out scandal-ridden Malaysian state fund 1MDB and try to get the US and other countries to drop corruption probes into the fund. in exchange for infrastructure projects.

According to the Wall Street Journal, citing minutes of meetings between Chinese and Malaysian officials,  the offers were made in 2016. In return Malaysia offered China lucrative stakes in railway and pipeline projects for Beijing's Belt and Road infrastructure initiative, the report said.

The government of Malaysia  is unaware of the discussions detailed in the Journal report but is examining the matter, said Finance Minister Lim Guan Eng. The cost of China-backed projects was enlarged and Malaysia will check whether that was due to 1MDB links, Lim said in Kuala Lumpur.

"But I have to refer back to see if there are details or things explicitly said," he said, adding that the government is looking through records. "If this is said, this is something we will pursue."

Chinese officials told visiting Malaysians that China would use its influence to try and get the US and other countries to drop probes of allegations that allies of then-prime minister Najib Razak and others plundered the fund, according to the Journal. In return, Malaysia offered stakes in railway and pipeline projects as part of China's Belt and Road Initiative.

The minutes state that the projects were to be presented as market-driven initiatives, even thought their real purposes were shoring up Najib's government, settling 1MDB debts and deepening Chinese influence in Malaysia, according to the Journal.

In a statement in response to the Journal report, the Chinese embassy in Kuala Lumpur said China never attached political conditions to its cooperation with other countries. "China has all along adhered to the principle of non-interference in the internal affairs of any other country. We do not accept any groundless accusations made against China," the embassy said.

1MDB, founded by former Malaysian prime minister Najib Razak, is the subject of corruption and money-laundering investigations in at least six countries.