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FILE PHOTO: A combination photo shows former Malaysian premier Mahathir Mohamad during an interview at his office in Kuala Lumpur, October 18, 2013 (L), and Malaysia's Prime Minister Najib Razak speaking in Kuala Lumpur January 25, 2016. REUTERS/Samsul Said/Olivia Harris/File Photo


KUALA LUMPUR (Reuters) - Former Malaysian premier Mahathir Mohamad on Tuesday challenged Prime Minister Najib Razak to debate allegations of corruption and mismanagement levelled against them both during their terms in office.

Veteran leader Mahathir and his former protege Najib have been embroiled in a feud for nearly two years, with Mahathir campaigning to oust Najib over alleged graft linked to scandal-ridden state fund 1Malaysia Development Berhad (1MDB).

Najib denies wrongdoing.

Mahathir said Najib should attend a town hall session he dubbed "Nothing to Hide".

"This is a good platform to state the truth, and Najib should attend to speak the truth or address the allegations," Mahathir told a news conference.

"Also, I want to ask Najib on his many failures and several issues that have drawn public attention," he said.

Najib's office had no immediate comment on Mahathir's call.

The government recently formed a royal commission to investigate a two-decade-old multi-billion-dollar foreign-exchange scandal that occurred during Mahathir's tenure as prime minister.

The prime minister’s office said on Tuesday the commission would complete its investigation and present a report within three months.

Mahathir, who dealt ruthlessly with opponents during his 1981 to 2003 rule, has emerged at the centre of opposition to Najib, even at the age of 92.

Mahathir has joined a fractured opposition alliance and even offered to head the government again if it wins an election, due by next year. He would be the world's oldest prime minister if that happened.

"The fact is I'm the chairman of this grouping of opposition parties ... So I think I am the equivalent of Najib, albeit unofficially," he said.

1MDB is the subject of money laundering investigations in at least six countries. The U.S. Justice Department alleged in civil lawsuits that about $4.5 billion of funds were misappropriated from the fund.

Najib denied taking money from 1MDB after it was reported that investigators traced nearly $700 million to his bank accounts. Authorities cleared him of any wrongdoing saying the money was a donation from Saudi Arabia.

Najib is widely expected to call the election in coming months.

He will be fighting to reverse dismal showings for the ruling party in the last two elections, when it lost considerable ground although still won enough seats to rule in a coalition with its allies.

Najib's party has held power since Malaysia's independence in 1957.

(Reporting by Joseph Sipalan; Editing by Praveen Menon and Robert Birsel)

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