Luxembourg launches probe in Malaysia PM Najib Razak fund scandal

Luxembourg's state prosecutor has launched a judicial inquiry into allegations of money laundering involving hundreds of millions of dollars against Malaysia's sovereign wealth fund 1Malaysia Development Bhd (1MDB).

The prosecutor said on Thursday that the inquiry followed evidence that funds held by the Malaysian government in offshore accounts in Singapore, Switzerland and Luxembourg had been misused. "The investigation aims to trace the origin of four transfers in 2012 and one in at the start of 2013 for a total of several hundreds of millions of dollars," a statement from the prosecutor's office said.

The allegations concerned in particular the sums paid upon the issuance of two bonds in May and October 2012. 1MDB, whose advisory board is chaired by Malaysian Prime Minister Najib Razak, has been the subject of multiple investigations over the last year by authorities in Malaysia, Switzerland, Singapore and the United States following accusations of financial mismanagement and graft.

The fund said in a statement that it had not been contacted by any foreign legal authorities on any matters related to the company. Switzerland's chief prosecutor said in January that a criminal investigation into 1MDB had showed about $4 billion appeared to have been misappropriated from Malaysian state companies. Singapore said it had sequestered a large number of bank accounts as part of an investigation into possible money-laundering linked to the fund.