Former Malaysian Finance Minister Latest to be Charged in Corruption Probe

Recent Features

ASEAN Beat | Politics | Southeast Asia

Former Malaysian Finance Minister Latest to be Charged in Corruption Probe

Daim Zainuddin, a former close associate of ex-PM Mahathir Mohamad, has been accused of failing to declare millions of dollars worth of assets.

Former Malaysian Finance Minister Latest to be Charged in Corruption Probe

Former Malaysian Finance Minister Daim Zainuddin (in wheelchair) leaves the courthouse in Kuala Lumpur, Malaysia, Monday, Jan. 29, 2024.

Credit: AP Photo/Vincent Thian

A Malaysian court yesterday charged a prominent former minister and powerbroker with illegally concealing millions of dollars’ worth of assets, the latest development in a corruption investigation that is homing in on close associates of former Prime Minister Mahathir Mohamad.

Daim Zainuddin, 85, a key ally of Mahathir during his lengthy spell in power between 1981 and 2003, cut a sickly figure in court yesterday, attending in a wheelchair and face mask. He pleaded not guilty to a charge of failing to declare 71 assets, including 38 companies, 25 properties, and several luxury cars. He faces up to five years in jail and a fine if found guilty. Daim was granted bail after his lawyer cited health issues.

Daim served as finance minister during 1984-1991 and 1998-2001, and as treasurer of Mahathir’s United Malays National Organization (UMNO) from 1984 to 2001, in which capacities he did much to shape the direction of economic policy under Mahathir.

He is among one of several figures being investigated by the Malaysian Anti-Corruption Commission (MACC) on suspicion of holding wealth above that declared to the state. As Reuters reports, Daim’s wife, Na’imah Abdul Khalid, was charged last week for failing to disclose assets, while the anti-graft agency has asked Mahathir’s sons Mirzan and Mokhzani to declare the extent of their own wealth.

MACC opened an investigation into Daim in May of last year, into the “alleged embezzlement of state funds amounting to an estimated RM2.3 billion” ($500 million) in 1997. Daim was among nine Malaysians revealed to hold millions of dollars offshore in the Pandora Papers, a huge leak of financial records of politicians and public figures from across the globe, which MACC says forms the basis for the current probes, along with the Panama Papers, an earlier document leak. Mahathir’s son Mirzan was also named in the leaked documents.

After being asked, and reportedly refusing, to declare his assets to the MACC, the authorities have frozen or seized bank accounts and assets controlled by Daim or his family. Chief among these was the seizure in December of the $580 million Ilham Tower, a prime commercial building owned by Daim’s family, which is close to the iconic Petronas Towers in downtown Kuala Lumpur.

Prime Minister Anwar Ibrahim’s administration claims that the investigation into these one-time titans of the Malaysian political establishment is part of its broader campaign against corruption. But the fact that Anwar has long had an adversarial relationship (to put it mildly) with Mahathir and his camp, has led to inevitable claims that the probes are politically motivated.

In a statement issued after the court proceedings, Daim likened Anwar to “a wolf in sheep’s clothing who cried reforms” but instead abused government institutions to pursue his political foes, The Associated Press reported.

According to the AP, Daim referenced the case of Deputy Prime Minister Ahmad Zahid Hamidi, a longtime UMNO chairman, who was also faced trial for corruption until prosecutors controversially dropped the 47 charges against him last September.

“Anwar should know that all this is not without repercussions,” Daim added. “As he busies himself pursuing vendettas of the past, the ringgit continues in a free fall, the economy stagnates, while the sufferings of ordinary Malaysians are ignored.”

Others have questioned why Daim and Mirzan are the only two Malaysians named in the Pandora Papers to have been the subject of investigations. Also named among them are Deputy Prime Minister Ahmad Zahid Hamidi and Minister of Trade and Industry Tengku Zafrul Tengku Abdul Aziz.

Last week, Mahathir similarly accused Anwar, a former protégée he later sent to prison on politically motivated charges, of using MACC investigations to target political rivals. “I’m saying very clearly that the people who are against the government will have the law thrown in their faces,” he said. “Those who are for the government can escape.”

Daim has long been accused of corrupt dealings and conflicts of interest. Born in 1938, the lawyer-turned-businessman grew up close to Mahathir in Alor Setar, the capital of Kedah State, and the pair “enjoyed a friendship that contributed to the image and tone of the Mahathir administration,” the late journalist Barry Wain wrote in “Malaysian Maverick,” his 2009 biography of Mahathir.

According to Wain, Daim allegedly benefited handsomely from his proximity to power. During the Mahathir administration, he “made it clear he was not going to let conventional notions of conflict of interest interfere with the way he ran his private business empire, the economy, or UMNO’s financial affairs. They became deeply entangled.”

Whatever the motivations for Anwar’s raft of current investigations, it is clear that Malaysia’s recent political upheavals, which brought Anwar to office in late 2022, have upended old expectations about who enjoys political protection – and who is subject to the force of the law.