NAJIB A STEP AWAY FROM A REAL ‘MALAY SPRING’: AS 1MDB UNRAVELS, HE MAY USE FOREX RCI TO JAIL DR M, DERAIL THE OPPOSITION: BUT WILL MALAYS ALLOW IT OR TAKE TO THE STREETS & HAUL HIM & ROSMAH OFF TO THE ‘GUILLOTINE’

An investigation into foreign exchange losses at Malaysia’s central bank more than two decades ago has been seen as an attack on Mahathir Mohamad, a leading opposition figure.

A royal commission launched by Najib Razak, the prime minister, has been criticised as an attempt to derail the formation of an opposition party to contest national elections next year.

Mr Mahathir, whose prime ministership from 1981 to 2003 covered the period of the forex losses, said the inquiry was a “desperate effort by Najib to silence his detractors”, according to the Associated Press.

The government set up the five-member Royal Commission of Inquiry in mid-July to investigate the loss of billions of dollars in foreign exchange trading by Bank Negara in the early 1990s.

The panel, which will seek to submit a report to the king by October 13, according to AP, will have authority to recommend the attorney-general prosecutes those it deems guilty.

The long-running scandal surrounding 1MDB, the government development fund, has embroiled a number of people close to Mr Najib.

Swiss investigators say $4.8bn in public funds disappeared through companies connected to 1MDB. Investigative authorities from Switzerland and Dubai to the US and Singapore have launched inquiries into the affair.

Mr Mahathir supported Mr Najib’s rise to power but the relationship soured after details of the 1MDB scandal emerged.

In recent months, Mr Mahathir has led calls for Mr Najib to step down and has formed a coalition with Anwar Ibrahim, a former political rival, with the goal of ousting Mr Najib in 2018.

Mr Najib, who set up 1MDB to boost national development, has denied any wrongdoing in connection with the fund and has rejected calls to step down as prime minister.

In 2016 Malaysia’s attorney-general ruled that Mr Najib had no case to answer in relation to a $681m transfer into his personal bank account.

Concerns about the state of the fund were raised last week when an Abu Dhabi sovereign wealth fund gave 1MDB five days to make a missed $603m payment. 1MDB said it would make the payment later this month.

1MDB has sought to sell off assets this year but one planned sale, the divestment from the $1.7bn Bandar Malaysia property development, collapsed in May.

– https://www.ft.com

.