SINGAPORE—A cross-border investigation involving embattled Malaysian state investment fund 1MDB is the largest money laundering probe ever undertaken in Singapore, state prosecutors said Friday.

The prosecutors' statements were made in support of the state's application to deny bail to Yeo Jiawei, a former wealth manager at Swiss private bank BSI SA's Singapore branch, who has been charged with money laundering in relation to the 1MDB investigation. The High Court overturned a prior decision from Singapore's State Court to grant Mr. Yeo bail, on the grounds there could be a risk he would interfere with witnesses.

An investigation led by the Singapore police force's Commercial Affairs Department focuses on money alleged to have originated at 1MDB and passed through BSI's Singapore branch, according to documents viewed by The Wall Street Journal.

The prosecutors' comments highlight the scope of alleged misappropriation of funds at the Malaysian state fund, also known as 1Malaysia Development Bhd., which is being investigated in at least six foreign countries including Singapore. Swiss prosecutors said earlier this year they believe as much as $6 billion has gone missing from 1MDB.

1MDB has repeatedly denied wrongdoing and said it has cooperated when contacted by investigators.

Opposition lawmaker Tony Pua, meanwhile, said in a statement this month that Malaysia's auditor general reported to parliament's Public Accounts Committee that $7 billion of 1MDB assets and transactions overseas "cannot be verified or traced."

Malaysia's Prime Minister Najib Razak said Friday that Malaysia's central bank had filed a police complaint against The Wall Street Journal for publishing a letter that he says was classified under the country's Official Secrets Act and which The Wall Street Journal reported was sent from the central bank to the Malaysian parliament's Public Accounts Committee.

"This is very serious, publishing a confidential document under the OSA is a very serious action on their part," Mr. Najib told reporters in Kuala Lumpur Friday. "They must be able to provide us with the answers."

Mr. Najib has said he has done nothing wrong in regard to 1MDB. He has said he cooperated with probes into the fund. Malaysia's attorney general has cleared Mr. Najib of any wrongdoing.

The letter published by the Journal stated that $1 billion of 1MDB funds sent offshore were transferred into a company called Good Star, controlled by Low Taek Jho, a Malaysian financier. Mr. Low helped run 1MDB from behind the scenes and managed Mr. Najib's bank accounts, the Journal reported in April. Mr. Low has previously said he was only an occasional and unofficial adviser to 1MDB.

The letter from the central bank appeared to contradict a letter sent by PetroSaudi International Ltd. to 1MDB, which named the Saudi oil company as the owner of Good Star and stated that the money was intended for a joint venture investment. A lawyer for PetroSaudi said the company stands by the contents of its letter to 1MDB.

A spokeswoman for Dow Jones & Co., publisher of The Wall Street Journal, said, "We stand behind The Wall Street Journal's coverage, which has been responsible, appropriate, and in the public interest."

"We remain committed to providing robust, evenhanded coverage of events in Malaysia," the spokeswoman said.

In written submissions to the High Court in Singapore, state prosecutors said Friday that the city's white collar police were investigating "the most complex and largest money laundering case ever to have taken place in Singapore." In oral statements, prosecutors added that the investigations centered on what is globally "one of the largest money laundering cases ever."

A supporting affidavit from Singapore's police said its investigation was into "complex, cross-border transactions, involving staggering sums of moneys."

Mr. Yeo's lawyer said in court that he has been unable to get clear instructions from his client on whether or not he disputes the charges, and said that his access had not been sufficient while his client is in custody. Singapore prosecutors dispute the contention from Mr. Yeo's lawyer.

Another lawyer for Mr. Yeo said previously that his client intended to fight the nine charges against him, which include attempting to pervert the course of justice and money laundering.

Attempts to reach Mr. Yeo for comment have been unsuccessful.

Mr. Yeo, appeared in court Friday dressed in purple prison clothing. He remained silent, and shook his head in disagreement when the prosecutor accused him of tampering with witnesses and suggested Mr. Yeo might do it again if released on bail.

Mr. Yeo's previous employer, the Singapore branch of BSI, was ordered this week to shut down its operations and fined $9.7 million after Singapore's central bank found it had breached money laundering regulations. Six senior employees of BSI including a former chief executive and Mr. Yeo were referred by the central bank to Singapore's attorney general for possible criminal offenses. On the same day, authorities in Switzerland said they had opened a criminal investigation into the Swiss parent company for allegedly failing to prevent suspected money laundering and bribery relating to its dealings with 1MDB.

BSI said in a statement immediately after the announcements that its group chief executive officer Stefano Coduri would step down with immediate effect and that it has cooperated fully with investigations by regulators in both Switzerland and Singapore.

Write to Jake Maxwell Watts at jake.watts@wsj.com

(END) Dow Jones Newswires

May 27, 2016 15:15 ET (19:15 GMT)