Malaysia prosecutor says right to clear 1MDB over central bank report

KUALA LUMPUR (Reuters) - Malaysia's attorney general said on Tuesday he was right to close an investigation by the country's central bank into troubled state-owned investor 1MDB, as there was no evidence the fund's officials had knowingly flouted the law. Last week Bank Negara Malaysia (BNM) said it had urged attorney general Mohamed Apandi Ali to prosecute 1MDB, saying the fund had secured permits to remit $1.83 billion overseas based on inaccurate or incomplete disclosure of information, breaching domestic regulations. The central bank's statement raised the pressure on 1MDB, which is at the centre of a political crisis over its debt of nearly 42 billion ringgit ($10.05 billion) and alleged financial graft. However Apandi said that at no point had the central bank tried to stop 1MDB's overseas transactions, nor had it required the fund to provide details of account numbers it was sending money to or to outline the manner in which the funds would be channeled. "Since there is no requirement, the omission on 1MDB's officials' part to disclose is not an offence," Apandi said during a press briefing on Tuesday. The central bank has also asked 1MDB to repatriate $1.83 billion back into Malaysia. However, the fund has said the sum has been spent or earmarked for debt settlement arrangements. The money was originally used for equity and loan investments in a joint venture with oil company PetroSaudi between 2009 and 2011. Responding to questions on Apandi's statement and whether 1MDB faced further action, a central bank spokeswoman said, "We will provide information on this in due course, when our administrative action is finalised." On Monday, former prime minister Mahathir Mohamad and several key UMNO leaders called for a swift resolution to the 1MDB scandal, signalling a further divide within Prime Minister Najib Razak's party, the United Malays National Organisation. ($1=4.1800 ringgit) (Reporting by Trinna Leong; Editing by Rachel Armstrong)