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Malaysia probes claim China offered to bail out 1MDB

AFP  |  Kuala Lumpur 

said Tuesday it was investigating claims offered to help out scandal-hit state fund 1MDB and get foreign probes into the controversy dropped in return for securing infrastructure deals.

Huge sums were purportedly looted from the fund in an audacious fraud, which allegedly involved former and contributed to his shock poll defeat in May.

reported Chinese officials offered in 2016 to help out the debt-mired fund, and said they would try to use their influence to get countries to drop investigations into the case, citing minutes from meetings between Chinese and Malaysian officials.

Stolen 1MDB money was allegedly laundered via a complex web of transactions around the world, and countries including Singapore, the US and have launched probes. Despite the reported Chinese offer, the investigations continued.

The Chinese also offered to bug the homes and offices of reporters in Hong Kong who were investigating 1MDB to find out who was passing information to them, the paper said.

In exchange, the report said that promised stakes in railway and pipeline projects as part of China's "Belt and Road Initiative", a major infrastructure drive seeking to link Asia, and

Within months, the government in signed billions of dollars worth of deals with Chinese state companies backed by funding from Chinese banks.

Malaysian Minister told that he could not confirm the claims but would look into the matter.

"If there is anything that explicitly states this in black and white, we will pursue the case," he was cited as saying.

A ministry spokeswoman confirmed Lim made the comments.

In Beijing, Chinese said he had not heard about the report, adding: "and are working together on specific projects and both countries have maintained very good and friendly relations".

The foreign ministry has previously denied money from its infrastructure programme was used to out 1MDB, the Journal said.

According to its report, Malaysian officials suggested that some of the infrastructure projects should be financed at above-market values, which would generate extra money for other needs.

Fugitive Malaysian financer Jho Low, the alleged mastermind of the 1MDB fraud, drew up plans for Malaysian officials to meet the Chinese and attended some of the meetings, the paper said.

Low, who is reported to be living in China, has consistently denied any wrongdoing.

Since the defeat of to a reformist alliance in May - the first change of government since Malaysia became an independent country - ties have cooled markedly between and

New Malaysian Mahathir Mohamad, who came out of retirement to oust former protege Najib amid public anger over 1MDB, has shelved USD 22 billion worth of Chinese projects.

The alleges that USD 4.5 billion was looted from the fund by Najib and his cronies, and spent on everything from artwork to high-end

Najib has been arrested and charged over the scandal since being ejected from office. He denies any wrongdoing.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, January 08 2019. 18:15 IST