(Dec 3): Former prime minister Tun Dr Mahathir Mohamad has rubbished the explanation by the Malaysian Anti-Corruption Commission (MACC) that the RM2.6 billion deposited in Datuk Seri Najib Razak's bank accounts was a donation from the Middle East, saying that the people needed proof of this.

He said the people wanted to know how the the anti-graft body had surmised that the money that went into the prime minister's personal accounts were not from debt-ridden 1Malaysia Development Berhad (1MDB) as reported.

"People making reports are being arrested. Their lawyers can be arrested. People living under threats are not reliable when making statements," he said in a blog post today, referring to the arrests of former Batu Kawan Umno leader Datuk Seri Khairuddin Abu Hassan and his lawyer Matthias Chang.

"So we cannot accept the statement by the MACC personnel just like that. We want proof. We want to know how RM2.6 billion in PM's account is not from 1MDB. Your explanations are without proof."

He said in cases such as these, it was the norm for an external audit to be done, adding there was an attempt to conceal 1MDB's activities and the transactions involving the RM2.6 billion.

"It is the norm for an external audit to be done. This is big money. Just saying it is a donation is not enough. Give credible evidence. Government institutions have been stopped from auditing and reporting on 1MDB.

"Until the government allows for proper audit by non-government auditors, I am entitled to make a reasonable assumption and to assume that there is more than just hanky-panky in the transactions of the 1MDB," he added.

On August 3, MACC said that the US$700 million (RM2.6 billion, based on conversion rate at the time) which was deposited into Najib's personal bank accounts came from donors.

It also said that the money in Najib's accounts was not from the state-owned strategic investment firm, 1MDB, adding the results of the investigations were referred to the Attorney-General.

"Investigations revealed that the RM2.6 billion alleged to have gone into Datuk Seri Najib Razak's accounts were contributions from donors, and not funds from 1MDB."

MACC, however, did not identify the donors nor did they disclose how the RM2.6 billion was spent.

In a separate response, 1MDB said it had already stated on June 3 that the state-owned investment firm had never provided any funds to Najib, adding that it was "confident that the truth will prevail".

1MDB president Arul Kanda Kandasamy said the company had already detailed how its RM42 billion debt was used, saying it was information that had been disclosed in its audited and publicly-available accounts for the financial year ending March 31, 2014.

However, Dr Mahathir said it was not enough for 1MDB to merely explain that it had more assets than the loans it had taken, adding that every cent must be accounted for.

"Where is the money from the Caymans? In what form is it? You (Arul Kanda) said you saw it. Is it cash or accounts in bank books? Why did the bank say it does not have the money? Which banks have the money now? Who is entitled to withdraw the money? What transactions have been made?" he asked.

"If you say it is a secret, I have a right to say you want to keep the amount and the transactions secret. After all RM2.6 billion was secretly put into the private account of the PM."

He said although Bank Negara must have information on the movement of the money, the current Attorney-General Tan Sri Mohamed Apandi Ali had dismissed the central bank's report on its findings of the probe into the matter.

"The PM says it is for Umno. According to the Societies Act, Umno must report all financial transactions. There is no evidence that it has done so. It is in breach of the Societies Act," the retired statesman said.

"Umno was declared illegal in my time. The reasons were hardly serious. Now Umno had not reported and not taken action to recover the money and report to the Registrar of Societies. What does the law say the Registrar should do?" – The Malaysian Insider