Malaysia names new anti-graft chief as corruption scandal drags on

KUALA LUMPUR (Reuters) - Malaysia appointed a new chief of its anti-graft agency on Friday, replacing a previous head who stepped down two years before his term ended amid a high-profile graft investigation linked to Prime Minister Najib Razak.

The Malaysian Anti-Corruption Commission (MACC) has led investigations into allegations of graft and financial mismanagement at state fund 1Malaysia Development Berhad (1MDB) and the transfer of 2.6 billion ringgit ($639.13 million) to Najib’s personal bank accounts.

Najib has denied any wrongdoing.

The multi-billion dollar scandal has shaken investors in Southeast Asia’s third-biggest economy and dented confidence in Najib’s ruling coalition.

The government said in a statement Dzulkifli Ahmad would be the new MACC chief commissioner from Aug 1.

Dzulkifli was previously at the office of Attorney General Apandi Ali, who cleared Najib of any criminal offences in 1MDB cases in January. Critics have questioned Apandi’s decision to clear the prime minister.

Dzulkifli had been touted as a possible successor for weeks before the announcement, despite calls by anti-corruption groups and civil rights organizations to appoint a leader from within MACC, on the grounds that would be more conducive to maintaining its integrity.

This month, the U.S. Justice Department filed civil lawsuits seeking to seize more than $1 billion of assets allegedly siphoned off from 1MDB, saying they were part of “an international conspiracy to launder money”.

The lawsuits do not name Najib, but refer to a high-ranking government official who received more than $700 million of the misappropriated funds.

A source familiar with the investigations told Reuters the official, identified in the lawsuits as “Malaysian Official 1”, was Najib.

The previous MACC chief, Abu Kassim Mohamed, asked for his contract to be terminated earlier than expected but insisted that there was no pressure on him to step down.

Najib was widely criticized last year after the government replaced Attorney General Abdul Gani Patail, who had led investigations into 1MDB, with Apandi. It cited Patail’s failing health for the change ahead of his retirement.

Reporting by Joseph Sipalan; writing by Praveen Menon; Editing by Robert Birsel