1MDB: What You Need to Know.
Blatant irregularities in the Malaysian state fund have left an incriminating international money trail. finews.chanswers the key questions about the 1MDB scandal, which is keeping investigators busy in seven countries.
1. What is 1MDB?
1Malaysia Development Berhad (1MDB) was founded in 2009 as a platform for foreign investment. Malaysian prime minister Najib Razak (pictured below) took over control of the fund the same year. Although 1MDB is officially a state fund, it has been used more for lending than for investment. Over time, the fund has piled up debts of some $12 billion.
1MDB attracted controversy from the beginning because of its closeness to the government. The fund is now at the center of an international corruption scandal.
2. What sparked the scandal?
In March 2015 1MDB was so heavily indebted that Malaysia’s credit rating was endangered. The transactions of the state fund were subsequently investigated for the first time. In the same month, Malaysian-British anti-corruption blog «Sarawak Report» reported that 1MDB money had flowed from funds in the Cayman Islands to accounts in an unnamed Swiss bank.
Shortly afterwards the Singapore financial supervisory authority (MAS) announced that it was helping Malaysia investigate suspicious flows of money in connection with the state fund. From then on, events moved quickly.
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