First published by Margherita Stancati and Ahmed Al Omran on March 3, 2016 p.m

A picture provided by the Saudi Press Agency on Wednesday shows Saudi King Salman (R) meeting Malaysia’s Prime Minister Najib Razak at the royal palace in Riyadh. PHOTO: AGENCE FRANCE-PRESSE/GETTY IMAGES

Malaysian Prime Minister Najib Razak’s trip to Saudi Arabia this week had all the trimmings that accompany a state visit, including lunch with the king, a keynote speech to businessmen and economists in Jeddah and a 12-minute news conference.

But the four-day stay was more notable for what wasn’t publicly addressed: the Malaysian government’s claim that a member of the Saudi royal family had donated $681 million that wound up in Mr. Najib’s personal bank accounts.

Mr. Najib ended his visit to the kingdom on Thursday, his first there since the controversy around a Malaysian state development fund, 1MDB, erupted last year, roiling politics in the Southeast Asian nation and leading to calls for the prime minister’s resignation.
The controversy emerged last July after The Wall Street Journal reported that Malaysian government investigators had found that $681 million had been deposited in Mr. Najib’s private accounts through banks, companies and other entities linked to 1MDB.

Malaysia’s top prosecutor said in January the funds were a “personal donation” from a Saudi royal, and thus legal. He also said most of the money was returned.

On Tuesday, the Journal reported that investigators from two countries believe deposits into Mr. Najib’s personal accounts totaled more than $1 billion, with much of it originating from 1MDB and moving through a complex web of transactions in several countries.

The Malaysian government issued later Tuesday what it said was a response to the Journal report. In its statement, the government said the funds, the amount of which it didn’t specify, “were a donation from Saudi Arabia and that the Saudi foreign minister has confirmed this.” It again said there was no link between the funds and 1MDB.

1MDB also replied, repeating its Feb. 19 statement that “it has not paid any funds to the personal accounts of the prime minister.”

Saudi Foreign Minister Adel al-Jubeir said in a New York Times interview published earlier this month he didn’t think the funds were a political donation or that they came from the Saudi government. He said he believed a private Saudi citizen was involved.

Earlier this year, a Saudi official told the Journal that the Saudi ministries of foreign and finance had no knowledge of the donation.

Saudi Arabia’s Foreign Ministry didn’t respond to a request Thursday for further comment.

Saudi Arabia’s King Salman hosted Mr. Najib for lunch on Wednesday and afterward, the prime minister told Malaysian reporters traveling with him that the two spoke of strengthening bilateral ties and the threat posed by Islamic State to both countries.

Malaysian politicians who support Mr. Najib pointed to the warm welcome he received in the kingdom as evidence the Saudi royal family didn’t dispute the Malaysian government’s explanation that the money was a donation.

In his speech in Jeddah on Tuesday, Mr. Najib spoke broadly of Saudi backing.

“I would like to personally thank the royal family of Saudi Arabia for all their support over many decades. We will always appreciate it, and we will never forget it,” he said.

After his speech, the prime minister briefly took questions from local media but wasn’t asked about the alleged $681 million Saudi donation.

A spokesman for Mr. Najib didn’t respond to an emailed request for comment, but the prime minister has denied wrongdoing or taking money for personal gain.

Riyadh typically offers very few details on state visits, and Mr. Najib’s was no different, with the official Saudi Press Agency saying the two leaders reviewed existing cooperation and ways to support it.

Saudi Arabia and Malaysia have an interest in maintaining cordial ties. Although it follows a much more moderate interpretation of Islam than Saudi, Malaysia is among the Sunni Muslim countries that have contributed forces to a continuing joint military exercise in northeastern Saudi Arabia.

Wan Saiful Wan Jan, the chief executive of the Institute for Democracy and Economic Affairs, a Malaysia-based think tank, said the trip to Saudi Arabia was a missed opportunity to address lingering questions on the origins of the funds that had entered the prime minister’s account.

“The explanation of why the donation was made and where it came from isn’t yet fully accepted by the public” in Malaysia, said Mr. Wan.

“If it really is a donation from Saudi Arabia’s royal family, at the very least it deserves some public thanks.”

Write to Margherita Stancati at margherita.stancati@wsj.com and Ahmed Al Omran at Ahmed.AlOmran@wsj.com

see original post at http://www.wsj.com/articles/alleged-saudi-donation-off-agenda-during-malaysia-premiers-visit-1457033200

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