[attach id=484968 size="medium"]Malaysia’s Prime Minister Najib Razak leaves Parliament in Kuala Lumpur yesterday. Photo: Olivia Harris/Reuters[/attach]

Malaysia’s attorney-general cleared Prime Minister Najib Razak of any criminal offences or corruption yesterday, closing investigations into a murky multimillion-dollar funding scandal that his opponents had hoped would bring him down.

Mr Najib was buffeted last year by allegations of graft and mismanagement at the debt-laden state fund 1Malaysia Development Berhad (1MDB) and by a revelation that about $681 million was deposited into his personal bank account.

But Attorney-General Mohamed Apandi Ali said the transfer was a gift from Saudi Arabia’s royal family, adding that no further action needed to be taken on the matter.

Opposition party leaders denounced the finding, saying the appointment of the attorney-general by the prime minister in the midst of the crisis suggested a conflict of interest. But analysts said it was a victory for Mr Najib that would allow him to focus on winning the next election in 2018.

Mr Apandi told a news conference no criminal offence had been committed by Najib in relation to three investigations submitted by Malaysia’s anti-graft agency.

“I am satisfied with the findings that the funds were not a form of graft or bribery,” he said.

“There was no reason given as to why the donation was made to PM Najib; that is between him and the Saudi family,” he said.

The involvement of the Saudi royal family is an unexpected twist in the saga over the funds transfer and the troubles of 1MDB, whose advisory board Mr Najib chairs. He denied any wrongdoing and said he did not take any money for personal gain. His office declined to make any comment on the attorney-general’s findings.

Mr Apandi said $620 million was returned to the donor in August 2013, about five months after the transfer, because it had not been utilised.

He did not clarify what happened to the remaining $61 million that was not returned or explain why it had taken so long for news of the return of the funds to be released.

Mr Najib, the son of a former prime minister, enjoys the backing of most of the powerful division chiefs in the ruling United Malays National Organisation (UMNO) party. Even his fiercest internal critics, such as influential former Prime Minister Mahathir Mohamad, accept that he cannot be unseated. The scandal has shaken investors in Southeast Asia’s third-biggest economy and rocked confidence in the coalition led by UMNO, which has held power since independence in 1957.

The ringgit slumped by more than 20 per cent in 2015 and has continued its slide this year, weighed down by global oil prices and political uncertainty.

“The attorney-general is satisfied with the findings, but it remains to be seen whether the public is satisfied and will put the 1MDB scandal to rest,” said Hak Bin Chua, ASEAN economist at Bank of America Merrill Lynch.

1MDB is under investigation by law enforcement agencies in Switzerland, Hong Kong and the United States, media and other sources have said.

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