Federal Criminal Investigation Department director Datuk Seri Mohmad Salled when contacted confirmed the arrest and the remand.
He said he was left with no choice but to internationalise the 1MDB financial scandal following the failure of the authorities in Malaysia to discharge their responsibilities and duties on the matter.
The source of the money remains unclear while Mr Najib denies any wrongdoing or taking any money for personal gain.
However, Khairuddin and his lawyer, Matthias Chang had attempted to leave the country through Kuala Lumpur worldwide Airport on Friday morning.
Critics argue that Mr Khairuddin’s charge is so vague that it is open to government abuse.
Mr Khairuddin had said he had sent documents to the FBI and had travelled to European and Asian capitals to spur investigations into Mr Najib’s dealings.
Khairuddin is not the first person to say he had been prevented from leaving the country.
In July, opposition lawmakers Tony Pua and Rafizi Ramli – who had been critical of the scandal-plagued state investment company 1Malaysia Development Berhad (1MDB) – said they had been barred without reason from travelling.
Khairuddin, immigration authorities and the police did not respond to telephone calls and emails seeking comment.
While Najib has since eliminated the internal threats by dropping the party’s deputy president Muhyiddin Yassin and a vice president from his Cabinet and replacing the Attorney-General and head of police intelligence in July, his actions contributed to shrinking confidence in the economy due to anxiety over governance issues.
The WSJ pointed out, however, that its previous report alleging that US$700 million (RM2.9 billion) was funnelled into Malaysian Prime Minister Datuk Seri Najib Razak’s accounts involved two deposits made via United States banks, a Swiss global bank and Wells Fargo in New York.
Najib and the company are under fire over allegations that perhaps more than a billion dollars went missing from overseas deals involving 1MDB, which is now struggling under massive debts.
On Tuesday, Switzerland’s federal prosecutor said Malaysia had agreed to arrange for Swiss officials to interview witnesses in their investigation of alleged money laundering and corruption related to 1MDB.
Najib has faced unprecedented criticism from within his ruling party, in particular form veteran former Prime Minister Mahathir Mohamad, who has called on Najib to step down.