An MP employed as a senior investigator at Malaysia’s Ministry of Finance is claiming that money laundering for 1Malaysia Development Berhad (1MDB) was a motivation for government contracts awarded to Chinese firms.
Tony Pua (pictured), a special officer at the ministry, said there were “clear elements of money laundering taking place”, in reference to the contracts for the Multi-Product Pipeline (MPP) and Trans-Sabah Gas Pipeline (TSGP).
“The entire project smelt like a scam … clearly elements of money laundering taking place,” the Democratic Action Party MP told the BBC.
Until the election in May, Pua was an opposition MP who was a prominent campaigner on 1MDB, which he called “the great, grandmother of all scandals”.
“We were giving money out to a Chinese company and we suspect this money was being funnelled to parties related to the previous administration,” added Pua, who is on a six-month contract as a special officer to the finance minister.
The ministry’s accusations represent a decisive change in mood in Malaysia towards China since Prime Minister Mahathir Mohamad took power in May.
Pua’s role as a special officer to the finance minister is to look through copious amounts of documentation related to 1MDB.
Before the election, Pua said he worked with “dribs and drabs” of data about 1MDB. “Now, anything you ask for, the tap opens like a beer barrel,” he told the BBC.
Pua said Mahathir’s government had been astounded by what it had found, including links to Chinese firms.
The Malaysian government has said it is investigating whether part of a loan from a Chinese state-owned bank for projects worth US$2.3 billion was used to help repay debts from the sovereign wealth fund.
On June 5, Finance Minister Lim Guan Eng said his predecessor Najib Abdul Razak had released RM8.25 billion – almost 88 per cent of the cost – for the two pipeline projects, despite little work being carried out.
The projects to build two pipelines were signed in 2016 under former prime minister Najib Razak, who courted Chinese investment.
Najib has denied any wrongdoing and has defended the pipelines, despite only 13 per cent of the work being completed for both projects, which started in April last year.
Najib said the deal was above board, and that China pledged to import US$2 trillion worth of Malaysian goods over five years and invest up to US$150 billion in Malaysia.
This claim was disputed by Lim.
Tony Pua. Picture credit: Wikimedia