By Rozanna Latiff and Joseph Sipalan
KUALA LUMPUR (Reuters) - The wife of former Malaysian prime minister Najib Razak was charged with 17 money laundering offences on Thursday, as anti-graft agents investigate billions of dollars missing from state coffers.
Rosmah Mansor, criticised for her extravagant lifestyle as first lady of Malaysia, and Najib, are at the centre of a wide-ranging graft probe launched after Prime Minster Mahathir Mohamad's stunning election victory in May.
Najib faces 32 charges from money laundering to abuse of power and criminal breach of trust over billions of dollars that went missing from state fund 1Malaysia Development Berhad (1MDB). He has denied any wrongdoing.
It was not clear if the charges against Rosmah relate to 1MDB, but Rosmah's arrest came after three rounds of questioning by anti-graft agents over 1MDB, from which U.S. authorities say over $4.5 billion was misappropriated. Last Wednesday, Rosmah was questioned for nearly 13 hours.
After spending a night in detention following her arrest by anti-graft investigators on Wednesday, Rosmah entered a Kuala Lumpur court on Thursday flanked by dozens of armed police officers, and smiling, waving and blowing kisses at the media.
Rosmah was charged with 17 counts under the anti-money laundering law. She was accused of handling funds of about 7.1 million ringgit ($1.71 million) from unlawful activities, and failing to declare the amount for tax purposes.
"The offences in which the accused has been charged are very serious," prosecutor Gopal Sri Ram told the court.
"In this case, the character and standing of the accused unfortunately goes against her because a person of her standing should not be in the dock in the first place," he said.
Rosmah pleaded not guilty to all charges. The judge granted her a bail of 2 million ringgit ($482,509.05).
"It's a good opportunity for Datin Seri Rosmah to clear her name," her lawyer Geethan Ram Vincent told reporters outside the court.
The money laundering charges carry a penalty of up to 15 years in jail and a fine of not less than five times the value of the proceeds of any illegal transfers, or five million ringgit ($1.21 million), whichever is higher.
Rosmah, 66, is known for flaunting a range of Hermes Birkin handbags and showy jewellery, and spending thousands of dollars in shopping sprees around the world.
Her flashy lifestyle has attracted criticism, with many Malaysians asking how she has been able to afford the luxury items on her husband's government salary.
Malaysians have been outraged by the seizure of around $275 million worth of cash and goods, including a vast collection of Hermes Birkin and other designer handbags, jewellery and watches from properties linked to Najib and Rosmah.
NAJIB AND WIFE IN COURT
Najib also appeared at another courtroom in Kuala Lumpur on Thursday for a pre-trial hearing, as he faces multiple charges in relation to about $10.6 million allegedly transferred into his account from SRC International, a former unit of 1MDB. Najib has plead not guilty.
He later joined Rosmah and they were seen leaving the courthouse together. "Thank you, thank you," Rosmah said while waving to some gathered supporters as she walked out of the courtroom behind Najib.
Allegations of corruption have dogged Najib for years, and came to a head in 2015 when the Wall Street Journal reported that nearly $700 million of funds from state fund 1MDB were diverted to his personal bank account.
1MDB is now the subject of money laundering probes in over six countries, including the U.S., Switzerland and Singapore.
Prime Minister Mahathir, 93, retired in 2003 after 22 years in power, but came out of retirement to join the opposition to topple Najib in this year's election.
Following his stunning victory, Mahathir reopened investigations into 1MDB and Najib’s possible involvement in its operations.
When asked about charges laid against Rosmah, Mahathir said the government was only following the law.
"It is not about revenge," Mahathir told reporters, according to The Star newspaper.
(additional reporting by Liz Lee; writing by Praveen Menon and A.Ananthalakshmi; editing by Michael Perry)