China offered to bail out 1MDB in exchange for billion-dollar deals

Blanche Robertson
January 9, 2019

It said within months of China's offer, Najib signed US$34 billion (RM139.8 billion) worth of rail, pipeline and other deals with Chinese state firms that were to be funded by Chinese banks and built by Chinese workers.

THE Chinese embassy in Kuala Lumpur today dismissed as "baseless" a news report's allegations that China worked out a secret deal with Malaysia to bail out the debt-ridden 1Malaysia Development Bhd in exchange for construction contracts.

Beijing has rejected a Wall Street Journal report saying Chinese officials offered to bail out scandal-ridden Malaysian state fund 1MDB and try to get the USA and other countries to drop corruption probes into the fund.

"China has all along adhered to the principle of non-interference in the internal affairs of any other country".

"We do not accept any groundless accusations made against China", the embassy said.

Lim Guan Eng, the current finance minister of Malaysia, said that he is "interested to have a copy of those minutes" that the WSJ examined, and would "pursue" anything that is "in black and white" regarding improper deals, the FT reports (paywall).

"The Chinese side is committed to working together with the Pakatan Harapan government under the leadership of Prime Minister Tun Dr Mahathir (Mohamad) towards creating a brighter future for China-Malaysia relations", it said.

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The Wall Street Journal has a bombshell story (paywall) about China's overseas influence, based on recently uncovered meeting minutes of the previous Malaysian government led by Najib Razak, and interviews with "people in position to know the events, among them a former official of Mr. Najib's government".

According to the Journal, Low, who is accused of laundering money through real estate in NY and Los Angeles, is hiding in China.

Najib has since been charged with corruption over 1MDB.

In a statement issued on his Facebook page late on Tuesday, Najib said China had never offered to bail out 1MDB and he defended the cost of infrastructure projects awarded to China.

China supported Najib in the last elections, with the ambassador from Beijing campaigning with candidates from Najib's coalition.

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. He denies any wrongdoing.

The factors are the Malaysian government's review of various infrastructure projects undertaken by Chinese companies and China's tighter currency control measures.

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