Tony Pua said in an interview that there were ‘clear elements of money laundering taking place’, in reference to the Multi-Product Pipeline (MPP) and Trans-Sabah Gas Pipeline (TSGP). — Picture by Yusof Mat Isa

KUALA LUMPUR, July 17 — A senior Ministry of Finance (MoF) official has claimed that there are elements of money laundering involved in the previous government’s contracts paid to China firms for work yet to be completed and in 1Malaysia Development Berhad (1MDB).

Tony Pua, who is special officer to the finance minister, told the BBC in an interview that there were “clear elements of money laundering taking place”, in reference to the Multi-Product Pipeline (MPP) and Trans-Sabah Gas Pipeline (TSGP).

“The entire project smelt like a scam. [There were] clearly elements of money laundering taking place,” the DAP MP was quoted as saying.

“We were giving money out — to a Chinese company — and we suspect this money was being funnelled to parties related to the previous administration.”

Putrajaya has said it is investigating whether part of a loan from a Chinese state-owned bank for projects worth US$2.3 billion (RM9.3 billion) was used to help repay dues of scandal-ridden state fund 1MDB.

The projects to build two pipelines were signed in 2016 by the administration of former prime minister Datuk Seri Najib Razak, who courted Chinese investment but was ousted in an election in May amid allegations of corruption at 1MDB.

Najib has denied any wrongdoing and has defended his RM9.4 billion Multi-Product Pipeline (MPP) and the Trans-Sabah Gas Pipeline (TSGP) projects, despite only 13 per cent of work being completed for both projects.