China offered to bail out 1MDB for deals – WSJ

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KUALA LUMPUR (Jan 8):  Senior Chinese leaders offered in 2016 to help bail out the 1Malaysia Development Bhd (1MDB) fund at the center of a swelling, multibillion-dollar graft scandal, said The Wall Street Journal (WSJ).

In a report Jan 7, WSJ said according to minutes from a series of previously undisclosed meetings it reviewed, Chinese officials told visiting Malaysians that China would use its influence to try to get the US and other countries to drop their probes of allegations that allies of then-Prime Minister Datuk Seri Najib Razak and others plundered 1MDB.

It said the Chinese also offered to bug the homes and offices of Journal reporters in Hong Kong who were investigating the fund, to learn who was leaking information to them, according to the minutes.

WSJ said in return, Malaysia offered lucrative stakes in railway and pipeline projects for China’s One Belt, One Road program of building infrastructure abroad.

It added that within months, Najib signed US$34 billion of rail, pipeline and other deals with Chinese state companies, to be funded by Chinese banks and built by Chinese workers.

Meanwhile, WSJ said an examinination of the China-Malaysia projects, based on documents and interviews with current and former Malaysian officials, offers one of the most detailed accounts to date of the political forces at work behind China’s Belt and Road program, a signature initiative of building ports, railways, roads and pipelines in some 70 countries to generate trade and business for Chinese companies.

WSJ reported that minutes of the Chinese-Malaysian meetings said that although the projects’ purposes were “political in nature”, it was imperative the public see them as market-driven.

WSJ said the Chinese government information office didn’t respond to requests for comment.