The noose tightens around 1MDB – Sir Wenger Khairy

Yesterday, the Umno Cheras division chief made a very telling change of mind.

Writing in the Umno Cheras portal and later through an interview with Malaysiakini, he called for the police and the authorities to speed up the investigation into the 1MDB scandal and to haul up controversial businessman Taek Jho Low for questioning.

This change of tone is very telling. Over the past several days, new revelations about 1MDB has hit the market and further eroded support for the prime minister over his handling of the 1MDB issue. Even worse, the issue is now no longer confined to Malaysia but is involving Singapore as well.

On Thursday, the Singapore daily, Today Online, published a story on the allegations made by Sarawak Report that 1MDB President, Arul Kanda Kandasamy, submitted fake documents to BSI Singapore branch on the existence of US$1.1 billion in the accounts of a subsidiary of 1MDB. 

The US$1.1 billion funds in question were related to one of the key issues raised by Tun Dr Mahathir Mohamad, which was the whereabouts of the proceeds from the redemption of the investments held in Cayman Islands.

To recap, in January, Arul Kanda had declared that 1MDB had fully redeemed the investment from Cayman Islands.  In a statement reported by The Star, Arul Kanda said “that the redemption of these funds, in full, draws a line under this matter. 1MDB can confirm that it has now redeemed the US$2.318bil invested by the company in a Cayman Islands-registered fund, following a commitment made by the chairman of the board of directors on December 23, 2014.”

Instead of putting the matter to rest, this new revelation casts further doubt on the entire nature of the loan extended to Petrosaudi and whether or not the proceeds of US$2.318 billion from the repayment of the loan were actually received in the first place.

What is even worse is that if the allegations of submission of false statements are indeed true, then there could be a breach of Singaporean law, which would be subject to investigation by the authorities in the republic.

Having personally known Arul Kanda, we advised the 1MDB president to exit the fund as soon as he could lest he be dragged into a controversy that was not of his making. With the threat of cross-border legal implications, the 1MDB president may now regret not heeding our earlier advice.

Instead of winding down, the 1MDB mess continues to grow bigger, dragging more and more people into it. 

Politically, the issue is becoming unbearable for Umno and even those who were the staunchest supporters of the prime minister have begun to publicly question the fund.  The statement by the Umno Cheras division leader follows on the heels of a revelation made by veteran newshound, Datuk A. Kadir Jasin, that senior Umno leaders have already seen documents pertaining to 1MDB and are beginning to take steps to arrest the issue and limit the loss suffered by the country.

The ball now falls back in the court of the PM. As hard as he had tried to dodge the issue, the 1MDB mess continues to grow bigger and sap his support among Umno grassroots and now, even the power hierarchy.

The police and the auditor-general can no longer be seen to be slow in taking action.  If the authorities continue to drag their feet, it is not out of the question that Umno itself may decide to take matters into their own hand, a situation that could mean the end of Datuk Seri Najib Razak’s controversy strewn leadership of the country.

* Sir Wenger Khairy reads The Malaysian Insider.