(Recasts with comment 1MDB task force, UMNO official)
KUALA LUMPUR, June 29 (Reuters) - Malaysia on Friday said it has frozen bank accounts of the political party once led by former premier Najib Razak as part of an investigation into alleged misappropriation from state fund 1Malaysia Development Bhd (1MDB).
The party, the United Malays National Organisation (UMNO), which led a coalition that had governed the country for more than 60 years until last month, is believed to have received funds from 1MDB when Najib was leading the party.
Malaysia reopened investigations into 1MDB in May after a shock election win by the opposition, led by veteran former leader Mahathir Mohamad. His alliance has vowed to recoup money allegedly siphoned off from the fund.
A taskforce looking into 1MDB said a number of bank accounts of several companies and organisations had been frozen.
“The 1MDB taskforce confirms it has frozen a number of accounts owned by individuals and organisations, including UMNO and other political parties believed to be involved in the misappropriation of 1MDB funds,” it said in a statement.
UMNO did not immediately respond to requests for comment.
Najib has consistently denied wrongdoing.
The freezing of the accounts has raised more questions about the fate of UMNO, which has been the party of all but one of Malaysia’s prime ministers. Mahathir led the country as UMNO leader in his first stint as premier, before he quit the party over the 1MDB scandal.
Several UMNO lawmakers have quit the party since the election, and it has also been abandoned by most of its coalition partners.
The party is set to hold an election for party president on Saturday, after Najib stepped down as UMNO chief following the election defeat.
Ahmad Zahid Hamidi, UMNO’s acting president, was quoted by state news agency Bernama as saying he expected UMNO officials, including ones elected to party posts on Saturday, to be investigated by the Malaysian Anti-Corruption Commission (MACC).
Finance Minister Lim Guan Eng told Reuters this month that UMNO was not the only political party to have received 1MDB funds.
U.S. authorities say more than $4.5 billion was misappropriated from 1MDB, and that nearly $700 million from the fund was diverted into the former premier’s personal bank accounts.
Najib, in an interview with Reuters last week, said that the $700 million was a donation from a member of the Saudi Arabian royal family. He did not identify the donor.
Since losing the election, Najib has been barred from leaving Malaysia, questioned by the MACC and has had his homes searched as part of the 1MDB investigation.
This week, police said nearly $275 million worth of jewellery, handbags, watches and other items were found at premises linked to Najib and his family. Authorities also found about $29 million in cash.
Najib has said the money was for election purposes and that it came from “genuine donations”.
Prime Minister Mahathir, meanwhile, has said Malaysia is looking to bring a range of charges against Najib, including embezzlement and bribery.
Late on Thursday, the Bernama news agency reported Mahathir as saying Najib would be prosecuted soon.
“I think he will be brought to the court soon,” Mahathir was quoted as saying on an official visit to Jakarta. (Reporting by A. Ananthalakshmi Editing by Robert Birsel)