Malaysia Forex Probe May Lead to Prosecution of Former Prime Minister

KUALA LUMPUR, Malaysia—Malaysia’s government on Tuesday launched an inquiry into massive foreign-exchange losses by the central bank more than two decades ago, in a probe that could lead to criminal prosecution of former Prime Minister Mahathir Mohamad.

Opposition leaders slammed the inquiry as a political ploy to discredit Mr. Mahathir just months after he set up a new political party. He leads an opposition coalition aimed at...

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