Mahathir Mohamad, Malaysia's former prime minister. Picture: GETTY IMAGES
Mahathir Mohamad, Malaysia's former prime minister. Picture: GETTY IMAGES

Kuala Lumpur — On Thursday, an inquiry into huge losses by Malaysia’s central bank recommended Mahathir Mohamad face a criminal investigation, ahead of polls at which the former premier wants to oust the current government.

The final report by the official Royal Commission of Inquiry into the scandal in the 1990s during Mahathir’s tenure also recommended that Anwar Ibrahim — finance minister at the time and now a leading opposition figure languishing in jail — face a criminal probe.

Mahathir, who led Malaysia for 22 years and has come out of retirement to take on scandal-hit Prime Minister Najib Razak, previously denounced the investigation into multi-billion-dollar foreign exchange losses as a "vindictive" attempt to target him and deflect attention from the government’s problems.

Najib is battling allegations that billions of dollars were looted from crisis-hit sovereign wealth fund 1MDB. Najib and the fund deny any wrongdoing.

He must call elections by August and political tensions are rising. Mahathir has emerged as a potent danger after joining up with a fractured opposition coalition that includes Anwar, his one-time foe and a charismatic political veteran imprisoned following a controversial 2015 sodomy conviction.

The report from the probe into the scandal at Bank Negara Malaysia found that 31.5-billion ringgit (about $8bn) was lost through foreign-exchange trading between 1992 and 1994.

"There is evidence from documents and testimonies of witnesses to prove that [the central bank] had undertaken voluminous, speculative trading activities for profit," said the inquiry’s report, according to state-run news agency Bernama. It recommended criminal investigations over alleged breach of trust and cheating by Mahathir and Anwar for allegedly withholding information about the true level of the losses from the cabinet.

Mahathir, who retired as premier in 2003, denied having interfered in the central bank’s operations in testimony to the inquiry in September.

The report also recommended that officers from the central bank, the finance ministry and the auditor-general’s department at the time of the scandal be placed under formal investigation. After its release, the secretary of the commission of inquiry, Yusof Ismail, lodged a police report and said police in the capital Kuala Lumpur would investigate the allegations, Bernama reported.

There was no immediate response from the police.

Anwar used to be heir apparent to Mahathir until he was sacked in 1998 by his boss over political differences, an episode that deeply divided the country. Since last year, the pair have sought to put aside their stormy history in an effort to oust Najib.


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