Switzerland opens criminal probe into Malaysian state fund

Despite denials from Malaysian authorities, Switzerland confirmed on Thursday that it had frozen tens of millions of dollars in assets from 1Malaysia Development Berhad (1MDB), the country's troubled state investment fund. According to the Swiss state prosecutor, a criminal probe was also opened against two executives working for 1MDB.

"The Office of The Attorney General of Switzerland (OAG) has frozen assets amounting several tens of millions of US-dollars on Swiss bank accounts," spokeswoman Anna Wegelin told French news agency AFP. She added that the criminal proceedings now underway involved money laundering and "suspected misconduct in public office."

The move follows months of allegations that huge sums of money had disappeared during deals with 1 MDB and increasing anger at Malaysian Prime Minister Najib Razak, who launched the fund in 2009.

The fund, however, said it knew nothing about the Swiss claims, despite insistence from Bern that they had been in contact with Kuala Lumpur: "As far as 1MDB is aware, none of the company's bank accounts have been frozen."

The 1MDB statement continued, however, that it is in the process of developing a better understanding of the ongoing investigations in Switzerland so the company can cooperate to its fullest extent."

Prime Minister Razak has unequivocally denied any wrongdoing, even as tens of thousands of protestors have taken to the streets of Kuala Lumpur and other Malaysian cities in the past week, including former Prime Minister Mahathir Mohamad, calling on their leader to come clean about 1MDB's activities.

The fund has been in the international spotlight since a July "Wall Street Journal" report implied that 2.6 billion ringgit (613 million dollars) discovered in Razak's bank accounts had come from the heavily indebted organization.

es/kms (AFP, dpa)