Embattled Malaysia PM Vows 'No Surrender' amid Funding Scandal

Malaysian Prime Minister Najib Razak on Thursday defiantly rejected calls to step down over a political funding scandal as the ruling party doubled down on its support for him in the face of an uncertain electoral outlook.

Najib vowed not to give in to unnamed "traitors" seeking his removal, as he addressed the annual assembly of the ruling United Malays National Organization (UMNO), the most closely watched in years due to the current tumult.

"Even though there are traitors, and no matter how many times we are pushed to the ground, there shall be no retreat, no surrender," Najib told the assembly in Kuala Lumpur, in a speech that drew a standing ovation from more than 2,000 delegates clad in the party's red colors.

Najib's troubles have raised new questions over whether UMNO -- which has ruled since independence 58 years ago but faces declining support -- can survive the next elections due by 2018 with his brand now tainted.

It was revealed in July that Najib received nearly $700 million in what the government calls "political donations." Najib has resisted calls to explain the money's source and purpose.

The discovery came as he was battling separate allegations that hundreds of millions of dollars were missing from deals involving a state firm he launched, 1Malaysia Development Berhad (1MDB).

Najib, 62, made only passing reference to the affair in his speech, saying he had briefed party leaders on the matter. He offered no new details.

Earlier in the week he said his conscience was "clear".

Malaysia's anti-graft agency said it interviewed Najib last week over the allegations, but it also gave no details.

Both Najib and 1MDB vehemently deny wrongdoing, but critics, including former strongman premier Mahathir Mohamad, say Najib has abused his office to cow whistle-blowers and hobble investigations, and should face a criminal probe.

On Monday, party vice president Muhyiddin Yassin, sacked as deputy prime minister by Najib in July for demanding answers in the scandal, urged the premier to leave office until investigations are completed.

But opposition to Najib has failed to gain traction in a party that detractors say is built on patronage and money politics.

"In light of the challenges, no matter how big, I will not at all surrender," Najib told the assembly, vowing to "continue to lead UMNO towards victory".

As party president, Najib commands solid support from UMNO power-brokers nationwide, and party leaders have rallied behind him in speeches this week.

"We are solidly with the prime minister. We will continue to remain steadfast with him," said Jehan Ongkomon, an UMNO delegate from a rural constituency, echoing other party representatives interviewed by AFP.

He said the allegations matter little to the rural, mostly ethnic Malay voters who are UMNO's bedrock.

The Muslim, ethnic Malay party has dominated multi-cultural Malaysia through coalition governments for decades, enshrining policies that favor the Malay majority.

But the large ethnic Chinese minority and a new generation of other voters have flocked to the opposition in disgust over racial politics and persistent accusations of corruption and democratic abuses.

The opposition won a majority of votes cast in 2013 parliamentary elections, but Najib's coalition retained power thanks to seat allocations that favour its rural strongholds.

Since the election, scores of opposition politicians and other government critics have been targeted with accusations of sedition and other charges.

UMNO's support was contradicted by a flood of social media comment this week.

"UMNO is alive, but the people are on the verge of death," said one Malay-language Twitter post.

"(Thursday's) speech was akin to an empty tin from the worst president in the history of UMNO," said another post on Najib's Facebook page.

Oh Ei Sun, an analyst and former Najib political secretary, said UMNO backed Najib because there were no other viable party leaders, but added he still has time to salvage the ship before the next polls.

"Three years is a long time. If the economy turns good, the people will forget everything," Oh said.