Malaysia PM denies pocketing $1 billion from state investment fund

Malaysia's Prime Minister Najib Razak smiles as he speaks during a press conference in Kuala Lumpur on May 7, 2013. (AFP/File)

KUALA LUMPUR, Malaysia – Malaysian Prime Minister Najib Razak rejected a new report Tuesday that a state investment fund likely funneled close to a billion dollars into his personal bank accounts.

Najib has been battling allegations of corruption and mismanagement for months over allegations that hundreds of millions of dollars was channeled into his accounts from indebted investment fund 1MDB, which he formed in 2009.

Malaysia's attorney general cleared Najib of wrongdoing in January, saying $681 million deposited in the prime minister's accounts was a donation from Saudi Arabia's royal family. He said most of the money had been returned.

The Wall Street Journal reported Tuesday that investigations into 1MDB have revealed that a total of more than $1 billion was deposited in Najib's bank accounts -- several hundred million dollars more than had been reported before -- and that investigators believe most came from 1MDB through a complex web of transactions in several countries.

Najib has repeatedly denied any wrongdoing.

A statement issued by Najib's office did not comment on the larger amount reported by the newspaper, saying only that "the funds received were a donation from Saudi Arabia."

It accused the newspaper of "relying solely on anonymous sources that may not even exist" and of "choosing to omit key known facts."

"This is unethical and against accepted journalistic practice," the statement said.

The Wall Street Journal said investigators, whom it did not identify, believe the money was transferred with the help of two former officials in Abu Dhabi, a country with which 1MDB has deep ties.

1MDB is mired in 42 billion ringgit ($10.1 billion) in debt and has been selling its assets to clear its books. Najib became embroiled in the scandal after documents were leaked last year suggesting that money deposited into his accounts may have come from entities linked to 1MDB.

The prime minister's office said Malaysian authorities have traveled to Saudi Arabia to review documents and interview members of the royal family, and confirmed that it was the source of the money.

1MDB separately said in a statement Tuesday that it has never deposited money into Najib's personal accounts. It also accused the Wall Street Journal of not offering evidence to back its claims and relying on anonymous sources.

Former Malaysian Prime Minister Mahathir Mohamad told reporters earlier Tuesday that there must be some truth to the Wall Street Journal's allegations because Najib has not taken any legal action against the newspaper.

Mahathir, a fierce critic of Najib, quit the ruling party on Monday, saying it has been hijacked by Najib to protect his own interests.

"I feel embarrassed that I am associated with a party that is seen as supporting corruption," Mahathir told a news conference. "I decided that I cannot be a party to all these things, so the least I can to do is leave the party."