Malaysia’s anti-graft probe expands into Singapore’s CLOB and court battle ensues

As the MACC intensifies its efforts, the probe delves into the activities of Daim’s key nominees and associates, representatives in companies believed to be connected to the former politician.

Embattled former Malaysian finance minister Daim Zainuddin, currently under investigation by the Malaysian Anti-Corruption Commission (MACC), faces a widening probe as the focus shifts beyond his family’s financial holdings. The investigation has now extended into the affairs of his business proxies, high-profile corporate personalities, and a cross-border corporate exercise with Singapore in the late 1990s.

In the midst of this, a separate legal battle is unfolding in the Malaysian courts. Daim’s family is seeking an order to compel the MACC to cease all investigations against them, lift the seizure of Ilham Tower, and return seized documents. Former Attorney General Tommy Thomas, representing Daim’s family, argues that the investigation is based on laws formulated after Daim’s retirement, adding that, at 85, Daim may struggle to recall events from 25 to 26 years ago.

Contrarily, senior federal counsel Liew Horng Bin contends that there is no statutory limitation for investigating alleged crimes. The court, led by Judge Wan Ahmad Farid Wan Salleh, is set to deliver its decision on the suit on March 4.

Adding to the complexity, Daim’s health has taken a toll, with the 85-year-old suffering from kidney-related ailments. His hospitalization occurred just before a scheduled meeting with MACC investigators to record a statement on the ongoing anti-graft probe. Sources reveal that the MACC had sought to question Daim at Assunta Hospital, but his medical team deemed him unfit for interrogation, a situation that persists.

The MACC’s investigation stems from an anti-money laundering inquiry initiated in May last year, focusing on a controversial corporate transaction valued at RM2.3 billion (US$500 million) in November 1997. The transaction involved publicly listed Renong Bhd and United Engineers Malaysia Bhd (UEM), once integral components of the business empire linked to the United Malays National Organisation (UMNO) party.

Since the investigation commenced, the MACC froze the bank accounts of companies tied to Daim’s business and mandated a declaration of his family’s financial holdings and other assets. Daim has resisted these demands, leading to the seizure of Ilham Tower in December 2023.

As the MACC intensifies its efforts, the probe delves into the activities of Daim’s key nominees and associates, representatives in companies believed to be connected to the former politician. Notable figures include Mohd Nasir Ali, Lutfiah Ismail, and lawyer Josephine Premela Sivaratnam, involved in listed entities like Kuala Lumpur City Corp Bhd, Plenitude Bhd, and Langkah Bahagia Bhd.

Of particular interest is the CLOB affair, where the investigation scrutinizes forced divestments during the closure of the Central Limit Order Book, an informal trading platform in Singapore. Set up in 1990 after Kuala Lumpur banned the trading of Malaysian stocks on the Singapore exchange, CLOB played a crucial role during the 1990s boom.

The regional financial crisis and political clashes, notably between Dr Mahathir Mohamad and Anwar Ibrahim, led to Malaysia imposing capital controls in September 1998. This move froze billions of dollars worth of stock in 112 Malaysian companies on CLOB. Daim reappointed as finance minister, approved a plan to manage the return of frozen equities, valued at approximately US$4 billion.

The investigation now extends to alleged corporate shakedowns during this period, with business and politics intertwining. The high-profile corporate shakedown involving the forced change of control in Multi-Purpose Holdings Bhd in 1999 is under scrutiny. Tycoon Lim Thian Kiat was compelled to sell his controlling interest to a group led by Singapore businessman Akhbar Khan, benefiting parties linked to Daim.

As investigations progress, statements from key players, including Daim and Akhbar, are anticipated in the coming days. The outcome of the court decision and the unfolding developments in the anti-graft probe will continue to shape the narrative around Daim Zainuddin’s legacy and the intricate ties between politics and business in Malaysia’s corporate landscape.