By Praveen Menon and Emily Chow
KUALA LUMPUR (Reuters) - The Malaysian government's crackdown on the media and dissenters widened on Friday, as the home ministry suspended publication of two leading financial newspapers over their reporting of alleged graft at the country's troubled state investment fund.
The Edge Weekly and The Edge Financial Daily were suspended for three months from July 27, just days after authorities blocked access to a website that has covered the scandal and has been critical of Prime Minister Najib Razak's government.
Two opposition lawmakers said this week that they had been issued travel bans in connection with investigations into the debt-laden state fund 1MDB.
Najib has also been weighing legal action against the Wall Street Journal which reported earlier this month that investigators looking into 1MDB had traced close to $700 million of deposits moving into his personal account.
Reuters has not verified the WSJ report.
Najib has denied taking any money for personal gain and said the corruption allegations are part of a malicious campaign to force him out of office.
The Edge Media Group, which has a staff of around 350 people in Malaysia, has been reporting extensively on the allegations directed at 1MDB.
1MDB, with debts of over $11 billion, is being investigated by authorities in Malaysia for financial mismanagement and graft. The state-owned firm's advisory board is chaired by the prime minister.
The Edge Media Group said in a statement on Friday that the ministry issued a notice that claimed the two publications' reporting of 1MDB was "prejudicial or likely to be prejudicial to public order, security or likely to alarm public opinion or is likely to be prejudicial to public and national interest".
"We don't see how exposing the scam to cheat the people of Malaysia of billions of ringgit can be construed as being detrimental to public and national interest," said The Edge Media Group publisher and CEO Ho Kay Tat.
"This is nothing more than a move to shut us down in order to shut us up."
Ho said The Edge would take the matter to court in a bid to lift the suspension.
The Centre for Independent Journalism (CIJ), a Malaysia-based non-profit group, condemned the suspension of the publications.
"For the government to censor a newspaper in this manner is an extremely heavy-handed measure and a breach of freedom of expression and media freedom in particular," it said in a statement.
Jailed opposition leader Anwar Ibrahim, writing in the Journal on Friday, said despite Najib's promises of reform and pledges to allow the voices of dissent to be heard, the prime minister "has doubled down on political repression".
Anwar, who led a coalition against the powerful ruling Barisan Nasional alliance, was jailed in February on sodomy charges that he says was a politically motivated attempt to end his career.
Najb's government has been under pressure from the opposition, and also from influential former Prime Minister Mahathir Mohamad, to explain allegations of graft in the state fund 1MDB that were raised by the media.