Hong Kong bank accounts belonging to several unnamed individuals have been frozen amid global investigations into the finances of a troubled Malaysian state fund, according to people with knowledge of the matter.
Those who had their funds locked are being probed by authorities in countries outside of Malaysia, such as Singapore, the people said, asking not to be identified because of the sensitivity of the matter.
1Malaysia Development Bhd. (1MDB), which defaulted on its debt last month, is at the center of multiple inquiries stretching from Switzerland to the U.S. amid allegations of money laundering and embezzlement, and has consistently denied wrongdoing. Malaysia’s central bank last week fined 1MDB and announced it was ending its investigation.
It’s not clear which Hong Kong authorities ordered the accounts freeze or if the banks acted on their own volition. The Financial Times in September reported that Hong Kong police were investigating some deposits related to 1MDB after a complaint was lodged. Malaysia said those claims were baseless and politically motivated, the newspaper reported.
Hong Kong’s anti-corruption agency and the police said they don’t comment on individual cases.
Authorities in Singapore said in February they had frozen “a large number” of accounts in connection with possible money-laundering related to the 1MDB probe. The Southeast Asian nation has charged two men following investigations into their dealings with the fund and related entities. Prosecutors there describe the probe as its “most complex cross-
border investigation.”
Authorities in other countries such as Switzerland are also examining claims that 1MDB was used to funnel money to politically-connected individuals. A Malaysian parliamentary committee had identified at least USD4.2 billion of irregular transactions by the fund.
Prime Minister Najib Razak chairs the advisory board of 1MDB and has faced calls from opposition politicians and former leader Mahathir Mohamad to resign as premier over alleged mismanagement at the fund. He has consistently denied wrongdoing.
The Malaysia attorney general’s office in January cleared Najib of any graft in receiving a large donation in his personal accounts from the Saudi royal family before the 2013 general election, with most of the money later returned. It rejected at least two requests from Malaysia’s central bank for criminal proceedings against 1MDB. Bloomberg
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