Police have arrested a Swiss national they claim leaked information of a Saudi-based energy company to a UK-based news website.
Xavier Andre Justo, 49, was arrested at a house on Koh Samui on Monday with computers, hard drives and other data storage devices.
It was part of a plot to discredit Malaysian Prime Minister Najib Razak, Malaysian sources said yesterday.
One report concerned a joint venture deal that had been initiated by Jho Low, a Penang-born financier and a friend of Mr Najib's stepson, in September 2009 between 1MDB and PetroSaudi International, and how Jho Low allegedly siphoned off US$700 million (24 billion baht) from the deal into an account controlled by him.
Mr Justo was believed to have provided information to the London-based Sarawak Report website for several reports about 1Malaysia Development Berhad (1MDB), a state development fund on which Mr Najib sits as the chairman of its Board of Advisers, Malaysian media reported.
PetroSaudi has denied the reports and 1MDB has denied links with Jho Low.
Malaysia's ex-prime minister Mahathir Mohamad has repeatedly urged Mr Najib to be accountable for the the disappearance of billions of dollars borrowed by 1MDB, or resign.
The 42 billion ringgit (405 billion baht) debt has weighed on Malaysia's sovereign rating and the ringgit in recent months. Mr Justo worked for PetroSaudi, but was paid an equivalent of 140 million baht to leave the company after he was found to have "behaved against the company's rules and regulations", Pol Col Akaradech Pimonsri, acting commander of the Crime Suppresion Division said.
Mr Justo later demanded 90 million baht from the company in exchange for not disclosing confidential information to rival companies, Pol Col Akaradech said. He denied the allegations, police said.
PetroSaudi yesterday said it was happy to set the record straight and apologised to Malaysians for the harm its "unscrupulous ex-employee" caused to them.