The former PM could be charged with money laundering and misappropriation of property, Reuters reports.

Malaysian authorities investigating scandal-hit state fund 1Malaysia Development Berhad (1MDB) are considering charging Najib Razak, the former prime minister, with money laundering and misappropriation of property, according to an exclusive Reuters report on Friday.

A source close to the investigations told Reuters news agency that Najib may be charged with dishonest misappropriation of property under the Malaysian Penal Code. The source declined to be identified as they were not authorised to speak on the matter.

Najib, who established 1MDB in 2009, is the subject of a money laundering and corruption probe after reports surfaced that millions of dollars allegedly made their way into his personal bank accounts from the fund and its former subsidiary, SRC International.

The former premier has consistently denied any wrongdoing in relation to 1MDB.

Najib, 64, suffered a shock loss in the May 9 general election, the first change of government since Malaysia gained independence from Britain in 1957.

Mahathir Mohamad, who was elected prime minister, has vowed to bring back funds allegedly siphoned from 1MDB and punish those responsible.

Malaysia’s new Attorney General Tommy Thomas said on Tuesday his office was studying possible criminal and civil action after receiving investigation papers on 1MDB from the Malaysian Anti-Corruption Commission (MACC).

The offence that Najib could face carries a maximum jail sentence of five years, a fine and whipping. The law, however, forbids men over the age of 50 from being whipped.

Any fine would be decided by the court depending on the offence and amount misappropriated.

According to Reuters’ source, Najib may also face money laundering charges, which would carry a maximum sentence of 15 years in jail and a fine of no less than five times the value of the laundered proceeds.

It is now up to the attorney general to decide whether or to accept the recommendations, file different charges or call for further investigations. The previous attorney general cleared Najib of wrongdoing in relation to 1MDB.

The MACC, the attorney general’s office, nor Najib’s spokesman did not respond to Reuters’ requests for comment.

‘Major scandal’ to be revealed

Najib said this week that if he was charged on “political grounds” he was confident the courts would find him innocent.

The 1MDB fund is the subject of money-laundering probes globally, including in the United States, Switzerland and Singapore.

The US Department of Justice alleges that more than $4.5bn was misappropriated from 1MDB, about $700m of which ended up in Najib’s personal bank accounts.

On Monday, police raided another house linked to Najib in the administrative capital of Putrajaya, the latest premises to be searched in connection with their investigation into 1MDB.

Authorities seized hundreds of luxury handbags and dozens of other bags filled with jewellery and cash in earlier searches of premises linked to Najib.

MACC this week called on four individuals to assist in its probe of 1MDB, including an aide to Jho Low – a central figure in the 1MDB scandal closely linked to Najib and his family.

Meanwhile, Malaysian Finance Minister Lim Guan Eng told Singapore’s Channel News Asia that Najib is “fully responsible” for the problems at 1MDB, adding that one more major scandal could be revealed soon.

“I would personally think that he is fully responsible,” Lim said. “Only the finance minister can authorise these transactions.”

During his time as prime minister, Najib also held the position of finance minister.

Mahathir’s new administration said that abuses during the time of Najib pushed the country’s debt to over $251.7bn.