1MDB
Swiss probe Malaysia fund sees possible misuse of staggering $4bn (£2.78bn).Reuters

What was initially seen as a local corruption scandal has now moved beyond Malaysian borders. Both Singapore and Switzerland have muscled in on the investigations over alleged misappropriation from Malaysia state fund 1Malaysia Development Berhad (1MDB), which has widened to include money-laundering and bribery of foreign officials, among others, and Malaysia is not in the least happy about it.

In a strongly worded response, Malaysian Communications and Multimedia Minister Mohd Salleh Said Keruak took the Switzerland Attorney-General Michael Lauber to task for "breaking with protocol" by releasing information to the media. "These premature statements appear to have been made without a full and comprehensive appreciation of all the facts," he said.

"It's very unusual, and against normal protocol, for a senior official of one country to speak publicly on the internal matters of another country. Yet that is what the Swiss attorney general has done," Mohd Salleh told The Guardian.

The minister insisted that Lauber should have first contacted his Malaysian counterpart instead of going to the media. "Does the Swiss AG normally talk to the media first, and then the relevant authorities afterwards?" Mohd Salleh asked.

So just exactly did the Swiss AG say? His office announced on Friday 29 January that it had formally asked Malaysia to help with its investigation into possible violations of Swiss laws related to bribery of foreign officials, misconduct in public office, money laundering and criminal mismanagement at the state fund.

Lauber had claimed that a criminal investigation into 1Malaysia Development had revealed that about $4bn (£2.78bn, €3.67bn) appeared to have been misappropriated from Malaysia's state companies. The Swiss AG's office had said in the statement: "The monies believed to have been misappropriated would have been earmarked for investment in economic and social development projects in Malaysia."

The Swiss authorities started its investigations into the state fund in August last year. It claims a small portion of the misappropriated money had been transferred to accounts held in Switzerland by former Malaysian public officials and current and former public officials from the United Arab Emirates.

The Nikkei Asian Review quoted Andre Marty, spokesman for Swiss AG as saying: "In the ongoing criminal proceeding ... Mr Najib Razak is not one of the public officials under accusation." Four cases of alleged criminal conduct have been identified, a Friday media statement from the Swiss authorities said.

The statement said that four cases involving criminal misconduct "have come to light" pertaining to Petrosaudi, SRC, Genting/Tanjong and ADMIC. No details were given on how the companies were involved in the alleged misconduct.

Petrosaudi has denied any wrongdoing in connection with its joint venture with 1MDB, noting that the venture was wound up in 2012. It however did offer to "cooperate fully with the authorities" if requested. The company also added that it has not been accused of any criminal conduct and denied being the subject of any investigation.

Genting and Tanjong did not respond to calls while ADMIC could not be immediately reached, Reuters reported. Separately in Singapore, the Monetary Authority of Singapore and the Commercial Affairs Department said in a joint statement that they had recently seized a number of bank accounts as part of an investigation into possible money-laundering linked to 1MDB.

The probe is part of a wider investigation undertaken with authorities in Malaysia, Switzerland and the US, Singapore said. "In connection with these investigations, we have sought and are continuing to seek information from several financial institutions, are interviewing various individuals, and have seized a large number of bank accounts," the Singapore agencies said.

The Malaysia attorney general's office responded to the Swiss statement the following day 30 January, saying that it would take all possible steps to follow up and collaborate with its Swiss counterparts. It however took pains to point out that the probe into 1MDB was separate from another investigation involving donations made to the Malaysian Prime Minister Najib Razak.

The prime minister chairs the advisory board of 1MDB, which came under heavy scrutiny following accusations of financial mismanagement and graft. The fund is reportedly facing more than $11bn (£7bn, €9.7bn) in debt.

Initially, fingers pointed at Najib when the Wall Street Journal reported that nearly $700m (£487m, €642m)of deposits were traced to Najib's personal bank accounts. However, the Malaysia attorney general cleared Najib of any criminal offence or corruption, saying that the money was a gift from the Saudi royal family. The prime minister had allegedly returned $620m (£431m, €569m) to the royal family because the money was not utilised.