WSJ: China Offered to Bail Out 1MDB in Return for Mega Projects

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Guan Eng says Putrajaya will pursue WSJ claim of China offering to scuttle 1MDB probe in return for lucrative Belt and Road contracts, and scrutinise China deals for 1MDB kickbacks.

More shocking exposé from the authors of Billion Dollar Whale:

  • China would use its influence to try and get the US and other countries to drop probes of allegations that allies of Najib plundered 1MDB in return for lucrative railway and pipeline Belt and Road projects
  • China offered to buy the homes and offices of WSJ reporters in HK who were investigating 1MDB to find out who was leaking information to them
  • Secret talks between Najib and Chinese officials to allow naval ships from China to dock at Malaysian ports

Finance Minister Lim Guan Eng says he will have to check the records to determine whether allegations that senior Chinese leaders offered to help bail out scandal-ridden 1MDB in 2016 is true.

“I don’t want to say yes or no for now, I have to check records.

Bernama

“If there is anything that explicitly states this in black and white, we will pursue the case,” he said.

Lim was commenting on a Wall Street Journal report, citing minutes from meetings it reviewed.

In return, Malaysia offered stakes in railway and pipeline projects as part of China’s Belt and Road Initiative.

“I am interested to have a copy of those minutes,” he said to reporters on Tuesday (Jan 8).

According to Malaysiakini, the new Pakatan Harapan government, which came into power after the May 9 general election, discovered new documents, including the minutes, over several months after a sweep of Najib’s offices.

Aside from reviewing the newly-discovered documents, WSJ said they also interviewed people in the know, including a former official of prime minister Datuk Seri Najib Razak’s administration.

In the WSJ report, it was alleged that the former government had colluded with China on such projects to inflate their values in order to divert some of the funds towards 1MDB that was struggling to pay its debt at the time.

The report cited minutes of meetings between members of the Najib administration and China’s leaders as well as from secret talks purportedly between the two countries at the time.

Bernama

The WSJ report asserted that Najib had turned to China at the height of his political crisis due to the 1MDB scandal and that Beijing saw this as an opportunity to further its own interests in the region.

The Najib administration undertook massive infrastructure projects such as the East Coast Rail Link that was almost entirely funded, managed and constructed by Chinese firms.

In July, the government suspended all contracts related to the China-linked Multi-Product Pipeline (MPP), the Trans-Sabah Gas Pipeline (TSGP) and the East Coast Rail Link (ECRL) projects.

Bernama

These projects were awarded to China Petroleum Pipeline Bureau.

Lim acknowledged that the costs of these projects were inflated, pointing out that the TSGP had been paid RM8.3 billion, representing 88% of the entire project cost, even though the work done was only 10%.

Chinese officials allegedly told visiting Malaysians that China would use its influence to try and get the US and other countries to drop probes of allegations that allies of then-prime minister Najib and others plundered the fund, according to the newspaper.

In return, Malaysia offered stakes in railway and pipeline projects as part of China’s Belt and Road Initiative.

China also offered to bug the homes and offices of WSJ reporters in Hong Kong who were investigating 1MDB, to learn who was leaking information to them, the newspaper alleged.

It could not be determined whether China provided any such information, the newspaper added.

The report is the latest exposé by the US news outlet that first disclosed the US$681 million deposit into Najib’s personal accounts, which has since led to money laundering charges against him after Malaysian investigators concluded that the funds originated from 1MDB.

Norman Goh/Malaysiakini

The WSJ article by Tom Wright and Bradley Hope – the authors of Billion Dollar Whale – also reported clandestine talks between Najib and Chinese officials to allow naval ships from China to dock at Malaysian ports.