Asia-Pacific

Malaysian opposition leader arrested for corruption

Former Malaysian Deputy Prime Minister Zahid Hamidi waves to media as he arrives at the Malaysia Anti-Corruption Commission. Source: AAP

Malaysia's anti-graft agency has arrested opposition leader and former deputy prime minister Ahmad Zahid Hamidi on corruption and money-laundering charges.

Malaysia's anti-graft agency has arrested a former deputy prime minister, Ahmad Zahid Hamidi, in connection with an investigation into suspected misappropriation of funds from a charity foundation, the agency says.

Ahmad Zahid leads the opposition as the president of the United Malays National Organisation (UMNO), the once-powerful party that ruled Malaysia for 60 years before being ousted in a shock general election defeat in May.

He is the latest former high-ranking official to be arrested over suspected graft since the election.

Ex-premier Najib Razak and his wife, Rosmah Mansor, face multiple charges in connection with a multi-billion dollar scandal at state fund 1Malaysia Development Berhad (1MDB).

Najib has denied wrongdoing and pleaded not guilty to 32 criminal charges involving more than 2.3 billion ringgit ($A776.5 million) allegedly siphoned from 1MDB.

Rosmah has pleaded not guilty to 17 money-laundering offences.

Ahmad Zahid was arrested following an investigation into alleged "abuse of power, breach of trust, and money laundering", the Malaysian Anti-Corruption Commission (MACC) said in a statement on Thursday.

He will be brought to a Kuala Lumpur court on Friday to face several charges under anti-corruption and money laundering laws, the MACC said.

According to media, Ahmad Zahid was accused of using funds from his family-run charity foundation to pay off credit card bills for himself and his wife.

He has denied wrongdoing. He says the payments were made in error by an aide and that he has since repaid the amount.

Authorities have frozen hundreds of bank accounts and blocked several people from leaving the country, as anti-graft agents ramp up a wide-ranging inquiry into how billions of dollars allegedly went missing from state coffers.

In June, the MACC said it had frozen several accounts linked to UMNO as part of their investigations into 1MDB.

US authorities say more than $US4.5 billion ($A6.3 billion) was misappropriated from 1MDB, and nearly $US700 million from the fund was diverted into Najib's personal bank accounts.

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