Datuk Seri Najib Razak's explanation about US$1.103 billion (RM3.6 billion) being transferred from Cayman Islands by 1Malaysia Development Berhad (1MDB) into a Singapore bank is untrue, Tun Dr Mahathir Mohamad said.

And in government affairs, the act of a "cover-up" is punishable by law.

The former premier, in his latest blog posting on chedet.cc said, all previous explanations given by Najib on the matter had violated the law under Section 218 of the Penal Code.

Dr Mahathir, who was finance minister from 2001 to 2003, said the offence could cause Najib to be sentence up to three years in jail, if convicted.

He said the fact that the funds of a government-owned company with a loan guaranteed by the government amounting to RM7 billion, which now cannot be traced, and the attempt to deceive the Parliament, is "something serious".

"There is an element of crime in this case that needs police investigation, and if the money still cannot be traced, then legal action must be taken against those involved," he wrote.

READ: 1MDB: Finance Ministry clarifies Najib's written reply in Dewan Rakyat

In a written reply to PJ Utara MP Tony Pua on Wednesday, Najib had said the balance of 1MDB investment managed by the Cayman Monetary Authority amounting to US$1.103bil had been redeemed in the form of assets instead of cash.

But on March 10, Najib, who is also Finance Minister, had confirmed in a written reply to Pua that the funds were held in a Singapore bank in the form of cash.

Subsequently, Finance Minister II Datuk Seri Ahmad Husni Hanadzlah clarified that Putrajaya had made a mistake in saying that the 1MDB redeemed its investments in the Cayman Islands in cash, when it was in ‘units’.

READ: Cayman funds: Government made a mistake - Ahmad Husni

"It is sad that I cannot refrain from saying that the prime minister had lied. In the case of 1MDB's funds which was brought from Cayman Islands and kept in BSI Bank Singapore, his written answer to the Parliament wasn't true at all," Dr Mahathir said.

"The first lie is that there was no money brought back by 1MDB. Second, there was no money deposited in BSI Bank in Singapore," he added.