WSJ report on 1MDB bailout won't affect Malaysia-China ties, says analyst

Cheryl Sanders
January 9, 2019

Chinese officials told visiting Malaysians that China would use its influence to try and get the U.S. and other countries to drop probes of allegations that allies of then-Prime Minister Najib Razak and others plundered the fund, according to the Journal.

The Wall Street Journal's (WSJ) recent report on the 1Malaysia Development Bhd (1MDB) bailout fiasco will not further affect bilateral relations between Malaysia and China, and exacerbate the strain on the economic front that followed the cancellation of China-backed projects, analysts say.

The embassy also said that China and Malaysia treated each other as friendly neighbours and honest partners all along.

In exchange, the report said that Malaysia allegedly promised stakes in railway and pipeline projects as part of China's Belt and Road Initiative (BRI), a major infrastructure drive seeking to link Asia, Europe and Africa.

The Chinese embassy said Beijing never attached political conditions to its cooperation with other countries.

The embassy denied such deals existed, saying China maintained a policy of non-interference in the affairs of another country.

Malaysia's Finance Minister Lim Guan Eng said on Tuesday (Jan 8) that the government was unaware of the discussions detailed in the WSJ report.

Ng has been detained in Kuala Lumpur since November 1, shortly after the U.S. Department of Justice announced charges against him, another Goldman Sachs official Tim Leissner, and Malaysian financier Low Taek Jho over the alleged theft of billions of dollars from 1Malaysia Development Berhad (1MDB).

Malaysian prosecutors say there is no conflict between the American attempt to extradite Ng and the charges he faces in Malaysia, and suggest the USA will wait for proceedings in Malaysia to wrap up before moving forward with their case.

An ex-Goldman Sachs banker facing charges in the USA and Malaysia over a massive financial scandal Monday had his bid to be freed on bail rejected by a Kuala Lumpur court. The incumbent Malaysian Prime Minister Mahathir Mohamad, who had replaced the now because of money laundering, the defendant's Ex-head of government Najib in may 2018, withdrew the contract for the projects.

"With the likelihood that the respondent will abscond, I am of the considered view that the respondent's presence (in court) can not be secured by the setting of bail or the setting of any condition to the granting of bail", he said.

Najib oversaw the setting up of 1MDB in 2009, and the United States Justice Department estimated US$4.5 billion was misappropriated by high-level fund officials and their associates between 2009 and 2014. The new administration has paused more than $20bn worth of projects awarded to Chinese firms, pending review.

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