(May 8): Deputy Prime Minister Tan Sri Muhyiddin Yassin has openly criticised the government's handling of the 1Malaysia Development Berhad (1MDB) scandal and warned that the issue was so serious that it might explode.

He told reporters following him on a working visit to Milan, Italy, that the debt-ridden 1MDB was the biggest factor that led to Barisan Nasional's (BN) loss in the Permatang Pauh by-election yesterday.

The Umno deputy president admitted that he was not even able to explain the scandal when campaigning because, "I don't even know what to say".

"The rakyat wants to know, not just Tun Dr Mahathir Mohamad. The rakyat wants to know why no one has been charged, why the 1MDB board has not been sacked, and about the position of the CEO and the prime minister as adviser," said Muhyiddin.

He said the situation was toxic and might have a huge adverse impact not just on the people, but Umno as well.

Dr Mahathir, the country's longest-serving prime minister, has criticised 1MDB and urged Prime Minister Datuk Seri Najib Razak to step down over the state investment arm's "vanished funds".

He had said he would not forgive Najib for the RM42 billion that 1MDB had incurred as debts, and raised concerns over 1MDB's business deals, including its purchase of several power assets and government-owned land.

Muhyiddin had also spoken on 1MDB on the past. On March 6, he said public funds should not be used to bail out 1MDB, adding that its board of directors should also be responsible if any wrongdoing was found.

He also said the Public Accounts Committee could start their own investigations into the strategic investment company, cautioned the 1MDB management to ensure that whatever plans they proposed would not put the government in a "difficult situation".

In the latest controversy surrounding 1MDB, Tabung Haji, a savings fund for Muslims planning pilgrimages to Mecca, yesterday said it bought a parcel of land from the state investment vehicle's Tun Razak Exchange (TRX) project for RM188.5 million, which it said was a "discounted" price.

It planned to build a residential tower at the site.

“The investment is a commercial decision which fits with Tabung Haji's risk appetite and went through all internal process accordingly," Tabung Haji chief executive officer Datuk Johan Abdullah said in a statement immediately after news of the controversial purchase was posted on a blog. – The Malaysian Insider