Malaysia's investigations into troubled state-development fund 1Malaysia Development Berhad (1MDB) didn't examine key evidence or interview Prime Minister Najib Razak, the Wall Street Journal reported.
Najib, who was chairman of 1MDB's board of advisors as well as Malaysia's finance minister, had ordered the auditor general to produce a report on 1MDB that was to be reviewed by a parliamentary committee, but that report was declared "classified" under Malaysia's Officials Secrets Act, which meant it could not be revealed to the public, the WSJ reported.
The auditor general's report said that $7 billion of 1MDB assets were unaccounted for, but the parliamentary committee didn't mention this in its published report, nor did the committee's head, Hasan Arifin, tell the committee about a letter he received from a senior central bank official that $1 billion of 1MDB funds were transferred to an offshore company owned by a close associate of Najib, the WSJ reported.
Najib has repeatedly denied wrongdoing in relation to 1MDB.
When Malaysian journalists asked why Najib wasn't called to testify, Hasan said "I have to earn a living," although he later said the remark was a joke, the Wall Street Journal reported, adding that Hasan did not comment for its story.
The office of Malaysia's prime minister issued a strongly worded response to the WSJ report.
"It is a matter of public record, and was widely reported by other media at the time, that the prime minister was interviewed for multiple hours on 5th December 2015 by the primary investigative body in this case, the Malaysian Anti-Corruption Commission," Seri Tengku Sariffuddin, the prime minister's press secretary, said in a statement Friday. "The prime minister gave his full cooperation to the investigators, and publicly instructed all relevant bodies in the Government to do so as well."
The statement accused the WSJ of bias and publishing "unverified lies," adding "an investigation should be launched into why the Wall Street Journal is taking sides in Malaysia's politics and internal affairs."
A spokesperson for Dow Jones, which publishes the WSJ, said via email "We stand behind our fair and accurate reporting of this evolving story which has in no way been undermined by recent events, and remain committed to providing robust coverage of events in Malaysia."
The spokesperson also referred to a Malaysian press report indicating that the country's Anti-Corruption Commission was not investigating 1MDB.
1MDB declined to comment on the WSJ's latest report and referred to its April statement on the release of the parliamentary committee's report. That statement said 1MDB viewed the parliamentary report as "comprehensive and conclusive," and that all of 1MDB's funds were fully accounted for.
Hasan didn't immediately return an email from CNBC seeking comment.