July 4 (Bloomberg) -- Malaysia's Deputy Premier Najib Razak denied allegations that he had an affair with a woman before she was killed two years ago, calling them a ``desperate attempt'' by opposition leader Anwar Ibrahim to divert attention from charges he faces.
``Absolutely not,'' Najib told reporters at a press conference at his parliament office yesterday. ``I never, never met her at all.''
Anwar is being investigated by police for alleged homosexual relations, a crime in Malaysia. He had said earlier yesterday there was a conspiracy to cover up ``shocking'' evidence linking Najib to the slain woman and called for an inquiry.
The two politicians are vying to become Malaysia's next leader after the opposition made record gains in March elections. Prime Minister Abdullah Ahmad Badawi, rejecting calls to resign, has said he'll hand power to Najib sometime after the ruling party's annual meeting in December. Anwar has predicted that he'll woo enough lawmakers to topple the government before then.
Malaysia's key stock index tumbled as the market resumed trading today on concern rising political tension will hurt investments and curb economic growth. The Kuala Lumpur Composite Index fell for a sixth day, losing 2.6 percent, to 1,123.84 at 9:04 a.m. local time, headed for its biggest drop since March 10 and its longest losing streak since March 2007.
Malaysian police in the past week confirmed investigations of Najib and Anwar. Both have called the claims against them fabrications intended to destroy their political careers.
Trading Allegations
Anwar has accused Najib of involvement in trumping up false homosexual sodomy charges against him, and yesterday held a press conference with a private investigator who alleged the deputy premier had an affair with Altantuya Shaariibuu, a Mongolian interpreter who was 28 years old when she was killed in a bombing in 2006.
The investigator, Balasubramaniam Perumal, said he had worked for Abdul Razak Baginda, a political analyst who was once employed by Najib and is on trial for abetting Altantuya's slaying. Balasubramaniam said he told prosecuting officers and police investigating the killing about the alleged affair, but they removed references to Najib from his statement.
Balasubramaniam's allegation is ``a terrible lie, malicious, fabricated, defamatory, which is designed to tarnish my image,'' said Najib, who previously has denied involvement in the killing.
`Shocking' Information
Anwar said Balasubramaniam's ``information is shocking'' and called the alleged alteration of his statement ``suppression of evidence'' by the police and prosecuting officers. Deputy Inspector General of Police Ismail Omar said the investigator's statement would be looked into, state news agency Bernama reported.
Responding to Anwar's allegation that he was behind the sodomy case, Najib said he had met the opposition leader's accuser but otherwise denied involvement.
The accuser ``came to my house because he needed help and was so traumatized,'' Najib said of the 23-year-old man.
Anwar, who was fired as deputy prime minister a decade ago and jailed for sodomy, was freed in 2004 after that conviction was overturned. He rejects all the charges against him.
To contact the reporter on this story: Manirajan Ramasamy in Kuala Lumpur at rmanirajan@bloomberg.net
Last Updated: July 3, 2008 21:38 EDT
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