BY JAMES HOOKWAY and CELINE FERNANDEZ
KUALA LUMPUR, Malaysia—A prominent lawyer was arrested Thursday on charges of sabotage, his attorney said, after earlier planning to travel to the U.S. to help urge authorities there to investigate money transfers into Prime Minister Najib Razak’s alleged personal accounts.
The lawyer, Matthias Chang, was arrested after visiting a police lockup facility to see Khairuddin Abu Hassan, who was arrested and detained last month on the same charge. The two men had planned to fly together to the U.S., where Mr. Chang previously said Mr. Khairuddin aimed to try to persuade U.S. authorities to investigate transfers into Mr. Najib’s alleged accounts. Mr. Chang was acting as Mr. Khairuddin’s personal lawyer to make sure he complied with legal processes and laws oversees, Mr. Chang’s attorney Zainur Zakaria said.
Both men are being held under Malaysia’s sweeping Security Offenses (Special Measures) Act, which allows for them to be detained for 28 days, another lawyer acting for Mr. Chang said.
THE MALAYSIA CONTROVERSY: A collection of WSJ articles on Malaysia’s corruption scandal, 1MDB and Najib Razak
“Matthias and I visited Mr. Khairuddin this afternoon at 2 p.m. for about 30 minutes,” lawyer Mohd Akmal Afiq Mohd said by telephone. “When we came out, police informed Matthias he was being arrested.”
A Malaysian police representative couldn’t immediately be reached for comment.
Mr. Khairuddin, accompanied by Mr. Chang, who was a political aide to former Malaysian prime minister Mahathir Mohamad, spent weeks lodging formal requests with law enforcement agencies around the world, trying to persuade them to investigate the money transfers. Malaysian government investigators earlier this year traced almost $700 million that had moved into Mr. Najib’s alleged accounts through agencies, banks and companies linked to 1Malaysia Development Bhd., known as 1MDB, The Wall Street Journal reported in July.
The government investigation hasn’t detailed what happened to funds that went into the prime minister’s alleged personal accounts, most of which were transferred ahead of national elections in 2013.
Mr. Najib has denied any wrongdoing, as well as taking money for personal gain.
The country’s anticorruption agency has said the money was a donation. But it didn’t specify the purpose of the contribution or identify the donor, who it said was based in the Middle East.
Criticism of the government’s handling of the controversy is mounting.
Earlier this week, nine of the country’s sultans called for a full investigation in a rare intervention in Malaysia’s political affairs. In a statement, the sultans, who are the largely ceremonial rulers of the country’s states, blamed the allegations surrounding 1MDB for tarnishing Malaysia’s reputation and contributing to an 18% decline in the value of Malaysia’s ringgit so far this year.
The office of Malaysia’s new attorney general, meanwhile, said Thursday that it had reviewed the central bank’s report into its investigation of the state investment fund and had concluded that it wouldn’t take any further action against fund officials.
Swiss authorities in August opened a criminal investigation into suspected money laundering allegedly involving 1MDB, while Singapore has also frozen accounts allegedly related to the transfers. A large portion of the money that entered Mr. Najib’s alleged accounts came from a British Virgin Islands-based company that held an account at a Singapore branch of a Swiss private bank, according to Malaysian investigation documents viewed by the Journal.
The 1MDB fund previously said it had not been contacted by overseas authorities but stood ready to cooperate.
U.S. investigators including the Federal Bureau of Investigation and the U.S. Justice Department’s Kleptocracy Asset Recovery Initiative, meanwhile, have begun looking into Mr. Najib’s assets, The Wall Street Journal reported last month.
Malaysian police have said they haven’t been notified by the FBI of any investigation into 1MDB or Mr. Najib.
1MDB was established shortly after Mr. Najib became prime minister in 2009 but is now struggling to repay some $11 billion in debts.
Mr. Najib removed his deputy prime minister in July after he criticized a lack of transparency over the transfers into the prime ministers alleged private accounts. He also fired Abdul Gani Patail as attorney general, while the government suspended the printing license of a local media group that had reported extensively on 1MDB. Malaysia’s High Court last month lifted a three-month suspension meted out to two publications owned by Edge Media Group, but the government is appealing.