US criticised for handing 1MDB cash to 'unelected' Malaysian govt

Malaysian anti-corruption campaigners expressed concern Wednesday that the United States had returned USD 300 million in funds stolen from the scandal-hit 1MDB state fund to an "unelected" government.

Billions of dollars were plundered from the sovereign wealth fund and spent on everything from a luxury yacht to artwork in a fraud allegedly involving Malaysian ex-leader Najib Razak and his inner circle.

Najib was ejected in 2018 elections largely due to public anger over the scandal, and a new reformist government then began the process of recovering money stolen from the investment vehicle.

On Tuesday the US Justice Department announced it had sent $300 million stolen from the fund to Malaysia -- and that it had now returned or helped the Southeast Asian nation recover more than $1 billion in funds and assets lost in the fraud.

The US is among several countries investigating the scam.

The Center to Combat Corruption and Cronyism, a Malysian activist group, welcomed the return of the funds, but said it was worried they were in the hands of an "unelected" government which had "ruthlessly seized power from the people".

The administration voted-in at the 2018 election, in the country's first change of power for six decades, fell apart several weeks ago amid bitter infighting and a new coalition took power without fresh polls.

The new government includes Najib's party, the United Malays National Organisation, and there has been widespread anger that his scandal-mired political vehicle has returned to office.

The Maklaysian activists urged the government to be clear about how the money would be used.

"The people of Malaysia are the rightful owners of the returned funds," the group said.

Najib, who denies wrongdoing, is on trial over the 1MDB scandal. Malaysia's new government has vowed to fight corruption, and insists high-profile graft trials will continue.