Asia-Pacific News

Malaysian PM's stepson used 1MDB funds to buy $34M London house: WSJ

Share

The troubled Malaysia state-investment fund 1MDB was back under the microscope Thursday with claims that the stepson of the prime minster had used cash from the fund to buy a London property, according to the Wall Street Journal who cited people familiar with the situation.

Executive Producers Riza Aziz (L) and Joey McFarland attend the 'Daddy's Home' New York premiere on December 13, 2015.
Malaysia PM Najib's stepson Riza Aziz used 1MDB funds to buy property, WSJ reports
Kuala Lumpar, Malaysia
Malaysia's finance ministry to dissolve 1MDB board of advisers
Protesters demanding Prime Minister Najib Razak's resignation during a rally in Kuala Lumpur.
1MDB says some of its bonds are in default after missed payment
Signage for 1Malaysia Development Bhd. (1MDB) is displayed at the site of the Tun Razak Exchange (TRX) project in Kuala Lumpur, Malaysia.
Abu Dhabi's IPIC says Malaysia's 1MDB in default on June rescue deal

The report states that PM Najib Razak's stepson Riza Aziz - a film producer and founder of Red Granite Pictures - purchased a house in central London in 2012 with money originating from the 1Malaysia Development Bhd (1MDB) fund. It adds that the redbrick four-story property is worth £23.25 million ($33.6 million) and is located in London's exclusive Belgravia neighborhood.

The Journal said that Aziz had denied any wrongdoing, as had Najib. Both did not immediately respond when contacted by CNBC for comment.

VIDEO0:2900:29
Najib's stepson may have spent $50M of 1MDB money to buy property
VIDEO0:3400:34
Najib Razak wins Sarawak elections despite 1MDB scandal
VIDEO0:2900:29
1MDB board of advisers to be dissolved

The report adds to a long-running saga surrounding the state investment fund, which is currently being investigated by local and international officials for alleged corruption and money-laundering. 1MDB teetered on the verge of default in 2015 after racking up 42 billion ringgit ($11 billion) in debt in just five years.

1MDB's outlook took a twist in July last year, after the WSJ reported that $700 million had been transferred from the fund to the prime minister's personal bank accounts back in 2013. Najib has repeatedly denied any wrong-doing. In January, he was cleared by the Malaysian Attorney General after a probe found that the money came from the Saudi royal family.

Read the full WSJ article here.

—CNBC's Pauline Chiou and Nyshka Chandran contributed to this article.

Follow CNBC International on Twitter and Facebook.