Businessperson Low Taek Jho, a central figure in the 1MDB scandal, is believed to be hiding in Macau, according to The Malaysian Reserve.
The newspaper, citing a government source, said authorities are not able to get to Jho Low as there is no extradition treaty with the special administrative region (SAR) of China.
"The source told The Malaysian Reserve that Low is in Macau and Malaysia does not have an extradition treaty with the former Portuguese colony, famous as one of the world's gambling havens," it said.
Prime Minister Dr Mahathir Mohamad had last Friday said Malaysia is trying to arrest the Penang native.
"But he is not in the country and we don't have extradition rights with the country where he is staying," he said.
Singapore authorities had on Saturday revealed that it had issued an Interpol red notice for Low since October 2016.
Malaysia, under the previous BN government, had refused to pursue Low.
Low is accused of being a key figure who put in place the structures needed to allow the misappropriation of 1MDB funds, which is the subject of an international investigation.
The US Department of Justice believed at least US$4.5 billion was misappropriated with former prime minister Najib Abdul Razak among the beneficiaries.
Najib had denied taking public funds for personal gain. Attorney-general Mohamed Apandi Ali had also cleared the former premier of wrongdoing.
After Pakatan Harapan swept into power in the May 9 general election, Mahathir accused Apandi of covering up the 1MDB scandal and ordered him to go on leave.
The MACC and police have also reopened the 1MDB investigations.