Malaysia’s anti-corruption body intensifies scrutiny on high-profile bailouts from the Mahathir era in the late 1990s

From left to right: Tun Mahathir, Mirzan Mahathir and Daim Zainuddin.

4th March 2024 – (Kuala Lumpur) According to an exclusive report by CNA, The Malaysian Anti-Corruption Commission (MACC) has sharpened its focus on several high-profile bailouts from the late 1990s. The investigations revolve around deals linked to influential figures from the Mahathir era, including the former finance minister Daim Zainuddin and the sons of the then Prime Minister Mahathir Mohamad.

The MACC is delving into the circumstances surrounding the RM836 million acquisition by Petronas, the state oil company, of debt-heavy shipping assets from Mirzan Mahathir, Dr. Mahathir’s eldest son, in March 1998. At a time when Petronas was under the direct purview of the Prime Minister’s Office, the transaction is attracting scrutiny due to the potential conflict of interest given Dr. Mahathir’s concurrent role as Prime Minister.

Another focal point of the probe is the government-led RM1.79 billion rescue of Malaysian Airline System in early 2000. This bailout aided businessman Tajudin Ramli, who then held a significant stake in the national airline. Authorities are examining the rationale behind the government’s decision to pay a substantial premium for Mr. Tajudin’s shares, particularly given the carrier’s financial distress and the inflated market value at the time of the transaction.

These investigations are not isolated incidents. The MACC is also probing additional transactions from the same period, including the defunct Central Limit Order Book (CLOB) in Singapore and the acquisition of Multi-Purpose Holdings Bhd. These deals have connections to Singapore businessman Akbar Khan and are believed to be tied to Daim Zainuddin’s financial activities.

The anti-corruption drive has encountered challenges, such as the difficulty in gathering two-decade-old documents and locating key individuals for the investigation. The MACC, which was established in 2009 to supersede the Anti-Corruption Agency, also faces internal challenges due to a lack of personnel with historical knowledge of the cases.

In January, Daim Zainuddin and his wife were charged for failing to declare assets linked to a vast array of companies and properties. Subsequently, the MACC has demanded asset declarations from Mr. Mirzan and his brother Mokhzani Mahathir, as a strategy to conduct a thorough analysis of wealth accumulation which could potentially reveal discrepancies indicative of corruption.

The ongoing investigations have reignited public discourse on the controversial bailouts that sparked significant political tension between Dr. Mahathir and his then deputy, Anwar Ibrahim. Their differing economic approaches during the financial crisis underscored a broader policy and political rift that persists in Malaysian politics.

Dr. Mahathir recently took to social media, now known as X, to express his grievances over what he perceives to be selective prosecution, suggesting political motivations behind the MACC’s current focus. Conversely, Prime Minister Anwar Ibrahim, who is engaged in a defamation suit with Dr. Mahathir, has accused the former premier of nepotism and misuse of power.