Hasina in Dhaka. (AP)

Dhaka, Jan. 5 (AFP): An extortion charge against Bangladesh Prime Minister-elect Sheikh Hasina has been dropped, one day before she is due to be sworn in as leader of the impoverished country, police said today.

Sheikh Hasina was accused in April last year of extorting 30 million taka ($440,000) from the Bangladesh-based regional head of a Malaysian power company. The charge formed part of the outgoing army-backed government’s crackdown on corruption.

“We found the charges to be false and fabricated. Sheikh Hasina has been cleared of all extortion charges in this case,” police investigation chief Lutfur Rahman said, adding that charges against the country chief of Malaysian power generation company Westmont may follow.

“The court is looking at whether he has made false allegations,” Rahman said.

Sheikh Hasina, who was Prime Minister between 1996 and 2001, was jailed for one year by the current regime on more than a dozen graft-related charges. She was released, although charges against her remained active, as part of a deal with the outgoing authorities so that she could contest last Monday’s elections.