Malaysia PM shuffles cabinet as corruption allegations mount

Dan Martin
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Malaysia's Prime Minister Najib Razak (R) chats with his newly-appointed Deputy Prime Minister Ahmad Zahid Hamidi (L) at the premier's office in Putrajaya on July 28, 2015

Malaysia's Prime Minister Najib Razak (R) chats with his newly-appointed Deputy Prime Minister Ahmad Zahid Hamidi (L) at the premier's office in Putrajaya on July 28, 2015 (AFP Photo/Mohd Rasfan)

Kuala Lumpur (AFP) - Malaysian premier Najib Razak on Tuesday sacked his deputy premier and attorney general in a cabinet reshuffle widely seen as an attempt to strengthen his hold on power as he battles corruption allegations.

Najib has come under growing pressure in recent months over claims that huge sums of money had been siphoned off from state-owned development company 1Malaysia Development Berhad (1MDB), which he launched in 2009.

Calls for Najib, 62, to step down mounted earlier this month after a Wall Street Journal report alleged that nearly $700 million had been routed to Najib's personal bank accounts.

The prime minister and 1MDB have vehemently denied any wrongdoing.

In a televised address, Najib announced he had dumped Deputy Prime Minister Muhyiddin Yassin, who has been critical of Najib's handling of the affair and has called for transparency. He is also considered Najib's chief rival for power.

Muhyiddin was replaced by Home Minister Zahid Hamidi, who is considered a Najib loyalist.

Clearly referring to Muhyiddin and other lower-ranking ministers who had raised questions over 1MDB, Najib said cabinet members "should not air their differences in an open forum that can affect public opinion against the government and Malaysia".

In total, seven new ministers and nine deputy ministers were appointed, according to reports, in a shuffle that Najib said was aimed at creating a more "unified team" ahead of the next elections, due by 2018.

Attorney General Abdul Gani Patail, who was part of a task force investigating 1MDB, also was sacked for "health reasons", a government statement said.


- 'Acts of desperation' -

But the moves touched off speculation that Najib was attempting to curb further calls for transparency and possibly avoid criminal charges. Multiple investigations into the scandal are under way.

"The removal of the AG and the DPM will be seen as acts of desperation by Najib," said Terence Gomez, a political analyst with the University of Malaya.

"I suspect that the 1MDB task force has sufficient evidence to file charges against key actors in this company which may include the PM."

Legal activist group Lawyers for Liberty said removing the attorney general "is shocking to say the least, and can only fuel public suspicion of interference" in the investigations.

Over the past year a series of investigative reports have alleged that hundreds of millions of dollars of 1MDB money had gone missing in murky overseas transactions.

The Wall Street Journal report this month said investigators had found that nearly $700 million had moved through government agencies, banks and companies linked to 1MDB before ending up in Najib's accounts.

The premier has denied the allegation, calling it "political sabotage", while 1MDB has said it did not transfer any funds to Najib.

However both Najib and the company have faced growing criticism for failing to disprove the various accusations.

Meanwhile, 1MDB is reeling under a $11 billion debt burden, blamed largely on a much-questioned drive to acquire power-industry assets.

Fears that it may require a massive bailout have contributed to a slide in the ringgit currency to 17-year lows.


- Deputy defends 'principles' -

Muhyiddin issued a statement Tuesday afternoon saying that related to 1MDB, "I have my own principles and stance in defense of Malaysians, the party's reputation and national interests."

But he accepted his sacking and gave no indication he planned to wage a campaign against Najib.

The push to oust the Najib has been led by former prime minister Mahathir Mohamad, who has warned that the political coalition dominated by the ruling United Malays National Organisation (UMNO) will lose power in the next polls unless he is replaced.

Mahathir led the coalition for 22 years to 2003.

The coalition has ruled since independence in 1957 but has steadily lost support among a new generation of voters yearning for greater freedoms and an end to government corruption.

Political experts say that despite public outrage over 1MDB, Najib is secure within UMNO owing to the party's deep-rooted patronage politics and the great power invested in the premier's office.

The son of a respected former prime minister, Najib once headed UMNO's youth wing, building up an extensive network of supporters who now rule the party's various regional divisions.