TEMPO.CO, Kuala Lumpur-Former Malaysian Prime Minister Mahathir Mohamad and some leaders of the ruling party jointly demanded resolution of the 1MDB state fund scandal on Monday and condemned a crackdown on dissent, signalling a divide within the coalition.

Mahathir has openly called for Prime Minister Najib Razak to resign over allegations of corruption at 1Malaysia Development Bhd (1MDB) and in a rare public display of unity, Mahathir and sacked deputy prime minister Muhyiddin Yassin called a news conference to express their concerns.

Voices of dissent from within the ruling United Malays National Organisation (UMNO) were quickly silenced with a July cabinet reshuffle that ousted Najib's critics, including Muhyiddin.

A former senior member of UMNO, Khairuddin Hassan, and his lawyer, Matthias Chang, were formally charged on Monday with attempts to sabotage Malaysia's banking and financial systems.

Khairuddin had called for U.S. law-enforcement authorities to probe the 1MDB scandal. Mahathir and the other UMNO leaders called for the two to be released.

"We see a climate of fear among the people," Mahathir told reporters. "The government is now defining the law according to their own needs. We are here to show that we are against the abuse of the law on our country."

Also present at the news conference were party vice-president Shafie Apdal, also sacked as a minister, and party elders Tengku Razaleigh Hamzah and Sanusi Junid.

Najib, who chairs the 1MDB advisory board, has been at the centre of a political storm over allegations of graft and mismanagement at the fund.

The scandal hit crisis point in July when media reports said investigators looking into 1MDB found that nearly $700 million dollars were transferred into bank accounts of the prime minister. Najib has denied talking any money for personal gain.

Muhyiddin, who is still the UMNO deputy president, said the party cannot be seen as uncaring.

"UMNO has a certain culture...you tend to suppress your feelings. What I'm asking is for them to be more expressive through the many platforms. Do not be fearful if what you're doing is right," he said.

Asked if he would call for Najib's resignation, Muhyiddin said: "I don't need to say it as others have said it... There are problems of concern and it is up to the prime minister to consider what he should do that is best for the nation."

1MDB has amassed debts of over $11 billion. The attorney general's office recently dismissed a recommendation by the central bank to prosecute.

REUTERS