KUALA LUMPUR (Reuters) - China on Tuesday rejected a Wall Street Journal report that said Chinese officials had offered to bail out scandal-ridden Malaysian state fund 1MDB and try to get the United States and other countries to drop their corruption probes into the fund.
The Journal, citing minutes of meetings between Chinese and Malaysian officials, reported on Monday that the offers were made in 2016. In return, Malaysia offered China lucrative stakes in railway and pipeline projects for Beijing’s “One Belt, One Road” infrastructure initiative, the report said.
In a statement in response to the Journal report, the Chinese embassy in Kuala Lumpur said China never attaches political conditions to its cooperation with other countries.
“China has all along adhered to the principle of non-interference in the internal affairs of any other country. We do not accept any groundless accusations made against China,” the embassy said.
1MDB, founded by former Malaysian prime minister Najib Razak, is the subject of corruption and money laundering investigations in at least six countries.
The U.S. Justice Department has estimated that a total of $4.5 billion was misappropriated by high-level 1MDB fund officials and their associates.
The scandal was a key reason for the shock ouster of Najib in last year’s election, which saw the return of Mahathir Mohamad as prime minister.
Najib has since been charged with corruption over 1MDB. He has pleaded not guilty and has consistently denied wrongdoing.
In a statement issued on his Facebook page late on Tuesday, Najib denied the allegations made in the Journal report. He said China had never offered to bail out 1MDB, and he defended the cost of infrastructure projects awarded to China.
Since coming to power in May, Mahathir’s government has accused the Najib government of inflating the cost of Chinese deals. The new administration has paused more than $20 billion worth of projects awarded to Chinese firms, pending review.
Malaysian finance minister Lim Guan Eng said the government would study the allegations made in the Journal report.
“I have to refer back to any details explicitly said. If it was said in black and white, then it is something we will pursue,” Lim was quoted as saying in Malaysian media.
Reporting by A. Ananthalakshmi, Joseph Sipalan and Liz Lee; Editing by Peter Graff