Malaysia rejects Swiss allegations over state fund 1MDB

The 1MDB state fund was set up in 2009 for social and economic projects

Malaysia has rejected allegations from Switzerland that billions of dollars may have been stolen from the South East Asian country's state fund.

Switzerland has been investigating Malaysia's scandal-hit 1MDB fund since last year.

Last week, its Attorney-General Michael Lauber said $4bn (£2.8bn) may be missing from Malaysian state firms.

A Malaysian minister said this was not possible due to extensive audits, and called the statements "premature".

The indebted 1MDB state fund, set up by Prime Minister Najib Razak to pay for socioeconomic projects, has been at the centre of a political scandal in Malaysia.

Mr Najib was himself cleared of any wrongdoing by Malaysian prosecutors last week.

The full background to the 1MDB scandal

Malaysia PM in the clear?

Funds 'simply could not have been taken'

Swiss authorities opened their investigation after 1MDB amassed more than $11bn (£7bn) of debt.

Mr Lauber's office said on Friday there were "serious indications that funds have been misappropriated from Malaysian state companies".

Some of the money, he said, had been transferred to Swiss accounts held by Malaysian former public officials and current and former public officials from the United Arab Emirates.

Mr Lauber had said there were "serious indications" that funds had been misappropriated from Malaysian state companies

He said the Malaysian companies concerned had made no comment on the losses believed to have been incurred.

In a strongly-worded statement on Tuesday, Malaysia's communications minister Salleh Said Keruak said 1MDB had undergone extensive audits, some by international firms, and that billions of dollars "simply could not have been misappropriated under such conditions".

The fund had also issued explanations and financial breakdowns about alleged losses, he said, and other state-linked firms had made public filings that showed they did not sustain losses caused by misappropriation of funds.

He said Mr Lauber's comments were "very unusual and against normal protocol", and criticised him for speaking to the media, rather than to Malaysian authorities who he said had been waiting to hear from Switzerland.

Mr Najib has been cleared of wrongdoing in connection with 1MDB

"These premature statements appear to have been made without a full and comprehensive appreciation of all the facts," said Mr Salleh.

Mr Lauber's office told the BBC it would not comment on political statements.

But it said it "took note with satisfaction of the reaction of its Malaysian counterpart and of its commitment to fully support Switzerland's request for mutual assistance".

Singapore, the US and Hong Kong authorities are also probing the fund.

On Monday, Singapore said it had seized a large number of bank accounts as part of an investigation into possible money-laundering linked to 1MDB. The city-state had already frozen two accounts last year.

Officials said they were working with counterparts in Switzerland, the US and Malaysia in their investigation.