Malaysian police search ex-PM's house; lawyer denounces 'harassment'

KUALA LUMPUR (Reuters) - Malaysian police on Thursday searched ousted Prime Minister Najib Razak’s home and other places linked to him in connection with an investigation into the scandal-plagued state fund 1Malaysia Development Berhad (1MDB).

Police entered Najib’s family home late on Wednesday, an extraordinary scene that thousands watched unfold as it was streamed live. Few would have predicted such a scenario before a May 9 general election that he was expected to win.

Amar Singh, the director of police commercial crime investigations, told Reuters that searches were being carried out at the home, at the prime minister’s office and a residence he had used, as well as two apartments owned by his family.

“We are in the midst of collecting information, we will have more details once we have completed our search,” he said, confirming that the searches were related to investigations into the 1MDB scandal that had dogged Najib since 2015.

Authorities in at least six countries, including the United States, are investigating the multi-billion-dollar scandal over the fund that Najib founded.

Najib has denied any wrongdoing.

A lawyer for Najib, Harpal Singh Grewal, said on Thursday afternoon the police search had gone on for almost 18 hours and was “harassment”.

Najib had indicated he was “prepared and willing to extend his fullest cooperation” to authorities but their long presence and the drilling open of a long-unopened safe suggested “unwarranted harassment,” Grewal said.

Grewal had police had found “nothing incriminating” but took away some personal items, including handbags and clothing.

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“This harassment has now continued for almost 18 hours and nothing meaningful has come from the search and seizure of what would appear to be insignificant personal items,” he said.

Asked if police would arrest Najib, Grewal said: “There is no indication that they will do it.”

A police truck packed with big, blue boxes left the compound of the house on Thursday afternoon, a Reuters witness said. There was no immediate word on what was in the boxes.

Days after Malaysia’s long-ruling political coalition was defeated in the election, new Prime Minister Mahathir Mohamad barred Najib and his wife, Rosmah Mansor, from leaving the country.

Najib was once a protégé of Mahathir, 92, who now says there is sufficient evidence to investigate the scandal at 1MDB.

Asked about the searches at a news conference, Mahathir said it was a police matter, and he had little information.

“I suppose the police have enough reasons to raid,” he said.

Mahathir has replaced the attorney-general and officials at the anti-graft agency, in what appears to be a purge of people seen as close to the former premier.

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U.S. authorities allege that more than $4.5 billion was stolen from 1MDB in a fraud orchestrated by a financier known to be close to Najib and his family. U.S. Attorney-General Jeff Sessions has called the 1MDB scandal “kleptocracy at its worst”.

Filings by the U.S. Justice Department in a civil lawsuit indicated nearly $30 million of the money stolen was used to buy jewelry for the prime minister’s wife, including a rare 22-carat pink diamond set in a necklace.

A Malaysian government advisory panel set up by Mahathir announced on Thursday that it would form a committee to look into matters related to 1MDB.

Malaysian politics has undergone a sea-change in the last eight days with the stunning defeat of Najib, his replacement by Mahathir and the pardon and release of jailed reformist Anwar Ibrahim on Wednesday.

Anwar teamed up with Mahathir, his ally-turned-foe-turned-ally, to oust Najib. The relationship between the two remains volatile, however, and will likely determine what course Malaysia will chart in the coming months.

Central bank Governor Muhammad Ibrahim said on Thursday Malaysia was unlikely to be hit with any financial uncertainty because of the political upheaval, although there were some worries about the fiscal balance.

“All data shows there is certainty and confidence,” he said, after announcing that gross domestic product growth in the first quarter of 2018 was 5.4 percent, close to estimates.

“What is less certain is the fiscal side.”

Additional reporting by A. Ananthalakshmi, Joseph Sipalan, Liz Lee, Fathin Ungku, Emily Chow; Writing by Raju Gopalakrishnan; Editing by John Chalmers, Robert Birsel