The ousted Malaysian prime minister, Najib Razak, has been arrested and faces 21 charges of money laundering over allegations that $628m linked to state investment fund 1MDB ended up in his personal bank accounts, officials said.
Najib will appear in court on Thursday afternoon where he faces charges including nine counts of receiving illegal proceeds, five counts of using illegal proceeds and seven counts of transferring the proceeds to other entities, deputy inspector-general of police, Noor Rashid Ibrahim, said in a statement.
Allegations that Najib and his cronies looted huge sums from the investment vehicle were a major factor in the shock defeat of his long-ruling coalition in elections in May, at the hands of a reformist alliance headed by Mahathir Mohamad.
Mahathir, 93, in his second stint as premier after coming out of retirement to take on his one-time protege Najib, has reopened probes into 1MDB that were shut down by the former government, and vowed to bring Najib to justice.
Since losing power, Najib has already been hit with seven charges related to claims he pocketed some $10m from a former unit of 1MDB.
However his arrest Wednesday was more significant as it related to a central allegation in the long-running scandal – that huge sums from the fund flowed into his bank accounts before the country’s 2013 election.
The Malaysian anti-corruption commission said in a statement that it had detained Najib as part of its investigations into the fund and “the entry of 2.6bn ringgit ($628m) into his personal account”.
James Chin, a Malaysia expert from the University of Tasmania, said Najib’s current arrest was “much more significant” than his previous one.
“I think the Malaysian people will be very, very happy. There were complaints that the government was not moving fast enough on 1MDB,” he said.
When reports about the bank transfers surfaced in 2015, they represented a turning point in the 1MDB scandal and dramatically raised pressure on Najib and his inner circle.
The attorney-general later cleared Najib of any wrongdoing, saying the money was a personal donation from the Saudi royal family, and closed down domestic investigations.
But allegations related to wrongdoing at 1MDB continued to multiply and the leader lurched sharply to the right.
He sacked critics in government, jailed political opponents and introduced increasingly authoritarian laws that analysts said were aimed at silencing any criticism to his rule.
Analysts thought Najib’s Barisan Nasional coalition, which had ruled Malaysia uninterrupted since independence from Britain in 1957, could never be beaten. But Mahathir capitalised on anger at the 1MDB scandal, and disillusionment at race-based politics in the multi-ethnic country, to push them from power.
Najib, his family and cronies were accused of using money stolen from 1MDB to buy everything from high-end real estate in the United States to pricey artworks. He and his luxury-loving wife Rosman Mansor became figures of hatred.