Malaysia's Mahathir hopes to get back lost 1MDB funds

Media caption, Malaysian voters react in 2018 to Mahathir Mohamad's victory over Najib Razak

Malaysia's new prime minister, Mahathir Mohamad, has said he believes most of the money missing in a notorious corruption scandal can be returned.

The row over the 1Malaysian Development Berhad (1MDB) state investment fund dogged his predecessor, Najib Razak, and contributed to his shock defeat.

"We believe that we can get most of the 1MDB money back," Dr Mahathir said.

Malaysia's former strongman is back in power at the age of 92 following a gap of 15 years.

He came out of retirement to oppose Mr Najib, a former ally, as the 1MDB scandal raged two years ago.

Mr Najib was accused of pocketing some $700m (£520m) from the fund, which he himself had set up, but he vehemently denied the allegations and was cleared by Malaysian authorities.

The fund, meanwhile, is still being investigated by several countries.

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What is the 1MDB scandal about?

Set up in 2009, the fund was meant to turn the capital city Kuala Lumpur into a financial hub and boost the economy through strategic investments.

Image source, Getty Images
Image caption, Mr Najib (L) was a former protege of Dr Mahathir (C)

But it started to attract negative attention in early 2015 after it missed payments for some of the $11bn it owed to banks and bondholders.

Then the Wall Street Journal (WSJ) reported it had seen a paper trail that allegedly traced close to $700m from the fund to Mr Najib's personal bank accounts.

Late last year, US Attorney General Jeff Sessions described the scandal as "kleptocracy at its worst".

The US government has been looking to seize more than $1.7bn in assets believed to have been stolen from the fund.

What action is Mahathir promising?

Asked on Thursday if the new government would introduce changes in agencies accused of acting on Mr Najib's behalf, Malaysia's new prime minister replied: "Certain heads must fall."

"We have to increase the confidence of investors in the administration," he said.

Image source, Reuters
Image caption, Dr Mahathir is back in power after 15 years

Dr Mahathir also renewed his promise to seek to have his former deputy prime minister, Anwar Ibrahim, released and pardoned.

When Dr Mahathir was previously in power, Anwar was jailed for corruption and sodomy after calling for economic and political reforms.

He was released in 2004 but jailed again under Mr Najib in 2015. He is currently due for release next month.

What is the scale of Mahathir's victory?

Image source, Getty Images
Image caption, Mahathir supporters waved flags outside the Istana Negara palace

Official results show his Pakatan Harapan (Alliance of Hope) coalition secured 113 of the 222 seats contested at Wednesday's election, including some which had only ever been held by the government.

The ruling Barisan Nasional coalition, which had been in power since independence in 1957, took 79 seats.

Rising living costs also weighed heavily on many voters and saw them peel away from Mr Najib and his once unshakeable coalition.

An extraordinary story

By Jonathan Head, BBC South East Asia correspondent

A day that began with an election result few had expected ended with cheers for the 92-year-old man who had made it possible, as he returned from being sworn in as prime minister.

Mahathir Mohamad, who retired after running the country for more than two decades, is back, this time at the head of an opposition movement whose members he once harassed and jailed, but which he recently joined to help them oust his successor, Najib Razak, whom he accused of shaming Malaysia with his corruption.

Malaysia has never experienced a political transition before. Dr Mahathir began his with a warning to the outgoing prime minister that he now faces possible prosecution.

For Mr Najib, heading a party which, until today, had never lost power, this election has been a disaster. He promised to respect the will of the people and the principles of parliamentary democracy - but it is not clear yet how co-operative he will be with the incoming administration.

No-one is quite sure what happens next. At 92, Dr Mahathir is still astonishingly fit but he has promised to step down within two years to make way for the imprisoned opposition leader, Anwar Ibrahim, who started the movement 20 years ago to unseat a prime minister whose name was then... Mahathir Mohamad, one of many ironies in this extraordinary story.

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