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Malaysia leader sacks deputy, attacks news groups amid ‘firestorm’ of graft allegations

Malaysia PM Najib RazakMalaysia Prime Minister Najib Razak on Tuesday fired his deputy premier, Muhyiddin Yassin, who publicly questioned the government’s closure of two newspapers.

Muhyiddin also asked about delays in the continuing investigation into state-investment fund 1 Malaysia Development Bhd.

The so-called 1MDB scandal involves allegations linking Prime Minster Najib to a bank transfer of about $700 million.

The Wall Street Journal broke the 1MDB story in a July 2 report. 

"The original source of the money is unclear and the government investigation doesn’t detail what happened to the money that allegedly went into Mr. Najib’s personal accounts," the WSJ said.

Malaysia’s Home Ministry suspended the two newspapers for three months after they published reports about the 1MDB scandal.

A news website was also blocked for reporting on the story.

The blocked website is called the Sarawak Report. The Malaysian Communications and Multimedia Commission ordered it blocked “based on complaints received from the public” that it is spreading misinformation about the 1MDB issue.

The site said nearly $700 million was transferred from the Singapore branch of Abu Dhabi-owned Falcon Bank into Najib's private account at AmBank (Malaysia) in Kuala Lumpur in March 2013, less than two months before a general election.

Separately, Najib's office was implicated this month in Australia's banknote bribery scandal. The prime minister denied the allegations and threatened to sue two Aussie newspapers that reported them -- The Age and the Sydney Morning Herald.

Brad Adams, Asia director of Human Rights Watch, said in a statement: “Blocking a website and threatening critics with prosecution will not make the firestorm over alleged government corruption go away.”

Malaysia's Home Ministry suspended The Edge Financial Daily and The Edge Weekly newspapers because of reports deemed to be “prejudicial or likely to be prejudicial to public order, security or likely to alarm public opinion or is likely to be prejudicial to public and national interest."

The Edge asked for a judicial review of the suspension order against it, the Diplomat said. "It emphasized that its reports were based on hard evidence and that it has already handed over bank documents to government investigators."

Human Rights Watch called on the government to drop "politically motivated criminal investigations and related travel bans against outspoken members of parliament and journalists."


Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.