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Malaysian PM sacks deputy, AG amid corruption scandal

world Updated: Jul 28, 2015 14:28 IST

Malaysian Prime Minister Najib Razak on Tuesday sacked his deputy premier and the attorney general as part of a major cabinet reshuffle. The PM's step is being seen as an attempt to tighten his hold on office amid allegations of corruption.

Najib has come under mounting pressure in recent months over claims that huge sums of money had been siphoned off from state-owned development company 1Malaysia Development Berhad (1MDB), which he launched in 2009.

Calls for Najib to step down mounted earlier this month after a Wall Street Journal report that Malaysian government investigators had discovered nearly $700 million had been routed to Najib's personal bank accounts.

The prime minister and 1MDB have vehemently denied any wrongdoing.

In a televised address, Najib announced he had dumped deputy Prime Minister Muhyiddin Yassin, who has been critical of Najib's handling of the affair and has called for more transparency.

Muhyiddin was replaced by home minister Zahid Hamidi.

Clearly referring to Muhyiddin and other lower-ranking ministers who had questioned the allegations surrounding 1MDB, Najib said cabinet members "should not air their differences in an open forum that can affect public opinion against the government and Malaysia".

In total, nine ministers were replaced in the cabinet reshuffle that Najib said was aimed at creating a more "unified team" ahead of the next elections due by 2018.

Attorney General Abdul Gani Patail, who was part of a task force investigating 1MDB, also was "terminated... for health reasons," a government statement said.

'Acts of desperation'

But the moves touched off speculation that Najib was attempting to curb further calls for transparency and possibly avoid criminal charges.

"The removal of the AG and the DPM will be seen as acts of desperation by Najib," said Terence Gomez, a political analyst with the University of Malaya.

"I suspect that the 1MDB task force has sufficient evidence to file charges against key actors in this company which may include the PM."

Over the past year a series of investigative reports have alleged that hundreds of millions of dollars of 1MDB money had gone missing in complex and murky overseas transactions.

The Wall Street Journal report this month said investigators had found that nearly $700 million had moved through government agencies, banks and companies linked to 1MDB before ending up in Najib's accounts.

The premier has denied the allegation, calling it "political sabotage", while 1MDB has said it did not transfer any funds to Najib.

However both Najib and the company have faced growing criticism for failing to disprove the various accusations.

Meanwhile, 1MDB is reeling under a $11 billion debt burden, blamed largely on a much-questioned drive to acquire power-industry assets.

Fears that it may collapse or need a massive bailout have contributed to a recent slide in the ringgit currency to 17-year lows.

Last week the home ministry suspended for three months the publishing permits of The Edge Media Group, which is known for its aggressive reporting on 1MDB, sparking fears of a press crackdown over the affair.

The home ministry said The Edge's reports on 1MDB threatened to disturb "public order."

The UK-based Sarawak Report, an activist website that had also published a series of 1MDB exposes, has also been blocked.

There was no immediate comment seen from Muhyiddin or Gani.

Political experts say that despite public outrage in Malaysia, Najib appears secure within his ruling United Malays National Organisation (UMNO) owing to the party's deep-rooted patronage politics.

Najib, the son of a respected former premier, once headed UMNO's youth wing, which allowed him to build up an extensive network of supporters who now rule the party's various regional divisions.