Swiss prosecutors are probing two officials of PetroSaudi International, the mysterious company involved in 1MDB's first business deal in 2009.

According to London-based Financial Times, the two individuals were not named by Swiss prosecutors, but the suspected offences included fraud, bribery and aggravated money laundering.

The international daily, citing unnamed Swiss officials, said that this was part of a wider probe on the alleged misappropriation of 1MDB funds.

One of the two were also probed for suspected document forgery. The report said the probe on the duo had begun in November, but it was not disclosed for operational reasons.

"The Swiss inquiry is also significant because it is the first officially disclosed criminal case targeted at employees of the Saudi company, a little-known but well-connected business co-founded by one of the kingdom’s princes.

"US investigators have previously alleged that US$1 billion of Malaysian public money meant for a joint venture between 1MDB and PetroSaudi was siphoned off to a Malaysian businessman.

"PetroSaudi has always denied wrongdoing," read the report.

The report cited PetroSaudi stating that it was "aware of an ongoing investigation by the Swiss authorities related to 1MDB" but was not the subject of the probe.

PetroSaudi also rejected claims that the company and its officials were involved in the misappropriation of funds from 1MDB and will co-operate fully with any investigating authorities.

The company's involvement with 1MDB began in late September 2009, after Putrajaya helped guarantee an RM5 billion bond meant for Terengganu Investment Authority (TIA).

Following this, there was a dispute between Terengganu government and Putrajaya, leading to the state government divesting its stake in TIA.

The company was taken over by Putrajaya which renamed the company into 1Malaysia Development Bhd and was marketed it as a sovereign wealth fund.

In a matter of weeks after Putrajaya took reigns of 1MDB, it entered into a joint-venture deal with PetroSaudi through a US$1 billion cash injection. That partnership lasted only six months.

According to the US Department of Justice, US$700 million from the US$1 billion went to a company called Good Star Ltd, a company registered in the Cayman Islands.

Bank Negara had written to the Public Accounts Committee (PAC) on April 6, 2016, to confirm that Good Star Ltd was beneficially owned by Jho Low, a Malaysian businessman with close links to the first family.

PAC investigations also revealed that 1MDB's board of directors did not approve the transfer to Good Star, and had been outraged by the matter.

Later this evening, 1MDB has released a statement that it was not involved in the Swiss investigations.

"There is no suggestion of wrongdoing by 1MDB or any of its officials. So it is irresponsible and reprehensible for an act by Swiss investigators to be twisted and framed as an inquiry into 1MDB and its shareholder.

"We wish to state in the strongest possible terms that 1MDB is not the subject of any criminal investigation either in Malaysia or internationally.

"We have and remain ready to assist the investigation of any lawful authority, in line with international protocols. Until today, 1MDB has not received any such request," said the company.

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