The Chinese government had refused to authorise a state-owned firm's deal with Johor-based Iskandar Waterfront Holdings (IWH) to acquire a 60 percent stake in Bandar Malaysia, according to the Wall Street Journal.

The publication described the collapse of the RM7.41 billion deal as a blow to Prime Minister Najib Abdul Razak, whom it noted had heralded the deal as “the final major milestone in the 1MDB rationalisation plan” during his New Year message.

“The 1MDB fund hasn't published financial statements for 2015 or 2016, so its current financial situation is unclear. Still, the deal's failure is likely to add to pressure on Najib, who also is finance minister, to find other ways to pay 1MDB’s debts,” said the report...