Allegations that huge sums were looted from the investment vehicle by Mr Najib and his cronies were a major factor in the shock defeat of his long-ruling coalition at elections in May to a reformist alliance headed by current prime minister Mahathir Mohamad.
Dr Mahathir, 93, in his second stint as premier after coming out of retirement to take on his ex-protege Najib, has reopened probes into 1MDB that were shut down by the former government, and vowed to bring Mr Najib to justice.
Since losing power, Mr Najib has already been arrested and hit with seven charges related to claims he pocketed some US$10 million (S$14 million) from a former unit of 1MDB.
However his arrest yesterday related directly to one of the most damaging allegations in the long-running scandal – that huge sums from the fund flowed into his bank accounts ahead of a hotly contested election in 2013.
The Malaysian Anti-Corruption Commission said in a statement that it had detained Mr Najib as part of its investigations into the fund and “the entry of RM 2.6 billion into his personal account”.
Mr Najib is scheduled to appear in court this afternoon where he faces several charges related to allegedly abusing his position, the anti-corruption commission said.
When reports about the bank transfers surfaced in 2015, they dramatically ratcheted up the scandal surrounding Mr Najib and his inner circle.
The attorney-general later cleared him of any wrongdoing, saying the money was a personal donation from the Saudi royal family, and closed down domestic investigations.
The US Department of Justice, which is seeking to recover items allegedly bought with stolen 1MDB cash in America, estimates that US$4.5 billion in total was looted from the fund.
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