The Australian government is trying to avoid investigating local links to a Malaysian corruption scandal, according to the country’s former prime minister Mahathir Mohamad.
In an exclusive interview with SBS World News the former leader of Malaysia, Mahathir Mohamad - who ruled the country with an iron-grip for 22 years - said Australia was turning a blind eye to corruption over the 1 Malaysia Development Berhad (1MDB) state investment fund.
"Australia has been involved to a certain extent but it looks as if the government of Australia wants to avoid any involvement in this crime committed,” Dr Mahathir said.
Malaysia’s current prime minister, Najib Razak, has been embroiled in the scandal since reports first emerged in 2015, alleging $900 million siphoned from the fund was deposited into his personal bank accounts.
Watch: SBS Exclusive: Former Malaysia PM speaks with SBS
Mr Najib denied all allegations of corruption and said they were part of a conspiracy to topple his government.
His hand-picked Attorney-General, Mohamad Apani Ali, cleared the prime minister of any wrongdoing and said the bulk of the money in his accounts was a gift from the Saudi Arabian royal family.
But the allegation of international money laundering connected to the fund have prompted investigations in Switzerland, Singapore, the UK and the United States.
Last year the US Department of Justice seized $1.3 billion in assets held by close associates and relatives of Mr Najib allegedly siphoned from 1MDB. Singapore also jailed three bankers last year for money laundering connected to the fund.
In total, it has been alleged that between January 2011 and April 2013 more than $1.4 billion (AUD) was deposited into Mr Najib’s personal bank accounts at the Malaysian bank AmBank.
In late 2015 AmBank was fined more than $16 million by the Malaysian banking regulator for non-compliance regarding money laundering allegations.
But Dr Mahathir said Australian law enforcement authorities were turning a blind eye.
ANZ has been the single largest shareholder in AmBank for more than a decade, with a 24 per cent stake.
That share, acquired in 2006, gave the ANZ the right to four seats on the 12 seat AmBank board and the right to appoint key management positions at the bank such as Chief Risk Officer and Chief Financial Officer.
But at a parliamentary hearing in March, ANZ CEO Shayne Elliott said the shares did not necessarily give them leverage at the bank.
“We have no ability to directly direct or influence AmBank in terms of its policies or procedures,” Mr Elliott said.
An ANZ spokesman declined to respond to question sent by SBS World News about whether ANZ staff working at AmBank were aware of transactions.
“We do not control AmBank and any questions about its operations need to be directed to them,” the spokesman said.
ANZ has denied any involvement in the Malaysian scandal.
Watch: Former Malaysian PM on Anwar Ibrahim sacking
“No employees of ANZ have had any involvement in that company (1MDB) or what has alleged to have happened at AmBank," Mr Elliott said in October last year.
AmBank did not respond to questions regarding ANZ’s level of involvement in the Malaysian bank.
Louis de Koker, a professor of law at Latrobe University who has advised overseas banks on money laundering regulations for more than a decade, told SBS World News the transactions should have set off “red flags” within AmBank.
"All the transactions that featured in this case, which were multi-million dollar transactions, would be viewed as large transactions by all banks, even the largest banks in the world,” Mr Koker said.
But Mr Koker said risk analysts at the bank might not have made management aware of the red flags.
"It is quite possible that you may be in a very senior position in a bank and you may not be aware of contraventions of the law or of inadequacies or vulnerabilities in the system if the controls aren’t properly designed,” he said.
AFP 'continue to evaluate allegations'
At a parliamentary hearing in March, Mr Elliott said the Australian Federal Police had not asked ANZ to hand over any documents and no staff had been questioned in relation to the matter.
But Dr Mahatir believes Australian authorities should look into Australian connections to Ambank.
“They (ANZ) hold a big share in that bank and that bank (AmBank) is involved in practically money laundering, so I think Australia should show some interest,” he told SBS World News.
Two years on from the scandal first emerging, the Australian Federal Police said they “continue to evaluate these allegations”.
“The AFP is assisting foreign law enforcement partners in their investigations. Given this matter is the subject of evaluation, it is not appropriate to comment further,” an AFP spokeswoman told SBS World News.
But James Chin, Director of the Asia Institute at the University of Tasmania, told SBS World News he thought Australia’s diplomatic relations was taking priority over law enforcement.
"The Australian Government has always been very careful about its relationships with key allies in Asia, especially countries where they have a longstanding relationship like Malaysia,” Professor Chin told SBS World News.
He added there are several other Australian links to the scandal, not relating to ANZ, which he believed also warranted investigation by the Australian authorities.
“Many people believe that some of the money from 1MDB has gone through the Australian financial system, also there are some people who believe some of the money may have ended up in Australia, especially in real estate holdings,” Professor Chin said.
Watch: Australia avoiding probe into Malaysia corruption
Mahathir’s last stand
Dr Mahathir’s criticism of Australia comes in the context of an ongoing campaign to remove Prime Minister Najib, his second hand-picked successor. Mr Najib became the prime minister in 2009 after Dr Mahathir fell out with his first successor, Abdullah Badawi.
When Dr Mahathir stepped down as Prime Minister in 2003 he promised to stay out of politics, something he has struggled to do.
“I thought I would be having my retirement resting and enjoying life, but it seems that it is not going to be like that,” Dr Mahathir said.
When the scandal broke in 2015, Dr Mahathir and some others within the ruling party, the United Malays National Organisation (UMNO), called for Mr Najib to step aside.
Dr Mahathir quit UMNO in February last year and formed a breakaway party along with other disaffected UMNO members.
Dr Faisal Hazis, a senior fellow of Malaysian politics at the National University of Malaysia, told SBS World News Dr Mahathir’s failure to remove Mr Najib from within UMNO reflected his diminished influence within the party he led for more than two decades.
“He failed basically to institute change through the party, so he is taking this quite drastic option of working with the Opposition,” Dr Faisal said.
‘I don’t care if they forget me’
Dr Mahathir sat down with SBS World News at a political study centre on the outskirts of Kuala Lumpur, devoted to researching former Malaysian leaders.
In one part of the building an entire wall was covered with colorful portraits of the former leader riding bicycles and smiling.
However Dr Mahathir said he isn’t concerned about his legacy.
“Well, I don’t mind if they forget me completely,” he said.
Dr Mahathir has formed some unlikely alliances with old enemies and is preparing to campaign against the government at general elections expected later this year.
He is even working with his former arch enemy, Anwar Ibrahim, who was his deputy until he fell out with Dr Mahathir in 1998 and led protests calling for political reform in the country which has been ruled by one party for 60 years.
Mr Anwar was imprisoned on charges of corruption and sodomy shortly after falling out with Dr Mahathir. He has always maintained his innocence and said the charges were politically motivated.
Mr Anwar was released from prison in 2004 and went on to lead the Opposition Coalition to electoral milestones in 2008 and 2013. He was jailed again in 2015 on separate sodomy charges and is currently behind bars serving a five-year sentence.
Sodomy is illegal in Malaysia, though it is extremely rare for the laws to be enforced.
In September last year, the two men whose conflict has shaped Malaysian politics for decades met face-to-face for the first time in 18 years.
“We have decided that we have to focus on this very important issue, the overthrowal of a present kleptocratic government. So for that we are prepared to forget the past,” Dr Mahathir told SBS.
When asked if has apologised for jailing Mr Anwar, Dr Mahathir said he didn’t apologise for anything.
“We have all said nasty things about each other. I don’t ask people to apologise for calling me all kinds of names and accusing me of all kinds of wrong doings,” Dr Mahathir said.
A Malaysian government spokesperson at the time said the meeting between Dr Mahathir and Mr Anwar “demonstrated the depth of their political opportunism and desperation”.
Following the US Department of Justice raids against Mr Najib’s relatives and associates last year, he has moved Malaysia, a long-time US ally, closer to China, increasing foreign investment and military ties with Beijing.
Dr Mahathir's been especially critical of the $100 billion development of a new city in the Malaysian state of Johor, near the Singapore border.
The Forest City project by Chinese company Country Garden Holdings Co has set an ambitious goal to house up to 700,000 people in the new city, built on four artificial islands. Many of the units are being sold to Chinese buyers.
“They have the money, they have the means to invest, buy property, buy land, and build cities for themselves. That amounts to a conquest, a colonisation of sorts,” Dr Mahathir told SBS World News.
Prime Minister Najib has accused Dr Mahathir of making false accusations against the Malaysian government over the development.
“He (Mahathir) made many false statements… they won’t get any citizenships. They only can have the rights to stay in Malaysia,” Mr Najib said in a speech in January.
Marriage of convenience
Malaysia has never had a change of government in the 60 years since independence, but general elections will be the first major electoral test for Mr Najib since the 1MDB scandal.
Many political analysts and observers predicted Mr Najib's downfall following the scandal, but the man who has ruled Malaysia since 2009 has proven himself the political survivor.
He has been instrumental in supporting a conservative Islamist opposition party to break away from the broader Opposition Coalition who worked together at the 2013 elections.
The elections are expected later this year and must be held before August 2018 at the latest.
While Dr Mahathir is working with Mr Anwar’s party in a new smaller opposition coalition, party infighting has prevented the new alliance from uniting behind a leader while Mr Anwar is in jail.
“It is divisive, the moment you name a (candidate for) Prime Minister there is going to be a lot of unsatisfied people who may sabotage the new Opposition Coalition,” Dr Mahathir told SBS World News.
“So it is better for us to name a Prime Minister if we win. It becomes irrelevant to name a Prime Minister now and then we lose.”
Dr Mahathir, whose long political career has made him famous for always removing his political opponents, said if the upcoming elections are "relatively fair" he is confident Mr Najib won’t win.
The man, once a famous firebrand against Western interference in the developing world during his time in office, also added he hoped Australia and other countries would send observers and closely monitor the upcoming election.
“We would like to see the whole world watch this election. That is one time I want involvement from the rest of the world,” Dr Mahathir said.
SBS requested an interview with multiple senior UMNO ministers and Mr Najib's office. They declined.