Malaysia’s Anti-Graft Chief Said Caught in Shakedown Racket
Bloomberg reports MACC used to help ‘mafia’ seize control of businesses
Malaysia’s Anti-Crime Commission allegedly has, in effect, been turned into a protection racket assisting a cabal of businessmen called the “corporate mafia” in seizing control of local companies under threat of violence and has protected them from prosecution, according to a meticulously researched 6,000-word article made public today (February 12) by Bloomberg News.
The article, by reporters Tom Redmond and Niki Koswanage, has kicked off a furor in Kuala Lumpur, with social media alive with critical comment. Drawing from a multitude of sources and printed documents, it implicates the MACC’s chief commissioner, Azam Baki, and other MACC officials in assisting businessman Victor Chin Boon Long and associates to select vulnerable companies for takeover, then carrying out investigations when asked. Officials at the agency are allegedly being used to support the interests of the cabal by threatening, arresting and detaining executives, sometimes recommending charges against them. Chin was quoted as denying the charges.
One or two of what the story called a “loosely knit group of about half a dozen men,” often buys a stake in the target company. “Then the MACC starts an investigation of the founders. Their bank accounts are frozen. Often, the executives are suspended from management positions and removed from the board. In some cases, they just quit and sell their shares.”
Affair shakes Anwar government
The affair, which is shaking the administration of Prime Minister Anwar Ibrahim to the core, is the second major scandal to come to light in little more than a month. In January, a massive affair dealing with military procurement projects over the period 2023 to 2025 blew up including booze and hookers in officers’ messes as well, with dozens of officers directly involved and facing severe disciplinary action.
Malaysia is also the home of the 1Malaysia Development Bhd scandal, called by the US Justice Department the biggest kleptocracy case it had ever handled, in which US$5.4 billion disappeared to mismanagement and corruption, and which resulted in the conviction and imprisonment of former Prime Minister Najib Razak.
Reports of the shakedown and allegations of the role of the MACC have circulated extensively across the business community and on KL blogs. The tactics are believed to have been used against IJM Corporation Bhd, a major conglomerate specializing in construction, property development, manufacturing and quarrying. Its chairman, Krishnan Tan, said at the time only that he was cooperating fully with the MACC. Another is said to have been Akbar Khan of major property developer Bandaraya, whose business and personal accounts were frozen and who was ordered to declare his assets and his family’s financial holdings by the MACC.
“Shady businessman shakes down corporate guys,” a business source told Asia Sentinel. “If they don’t pay, articles are written on obscure blogs, news portals are paid to reproduce article, shaming the corporation. If they still don’t pay, they are hauled up by MACC and mainstream media latch onto the story. If they pay, problem goes away. If they don’t, their lives are turned upside down.”
More believed involved
According to sources with wide knowledge of Malaysian politics, the “mafia” cited by Bloomberg involves prominent ethnic Malay figures including a former MACC commissioner and a well-known philanthropist and businessman, and officers in the Prime Minister’s office. The group, the sources told Asia Sentinel, have been shielded by the Malaysian Communications and Multimedia Commission, which has refused to act against blogs that have attacked the targeted businessmen and politicians.
The Bloomberg report also repeats criticisms circulating for months in Kuala Lumpur, that Anwar was using the MACC to allegedly exonerate his friends and supporters and go after his political foes, particularly former Prime Minister Mohamad Mahathir and Mahathir’s close friend and adviser the late Daim Zainuddin.
Anwar Ibrahim defended Azam, urging critics to consider the anti-graft head’s explanation before calling for his removal. Fahmi Fadzil, the current Minister of Communications in Anwar’s administration, didn’t respond to an Asia Sentinel email seeking comment on the controversy.
Chin linked to money laundering
A 2021 Malaysian tax agency letter seen by Bloomberg linked Chin to money laundering, alleging an audit of a company he founded called MMAG Holdings Bhd was created as a special purpose vehicle to launder money and invest it in Malaysian shares. The entities were allegedly registered under the name of a former Chin employee, Bloomberg said, and more than RM500 million (US$127 million) linked to organized crime and other “dubious financial sources” was deposited into their bank accounts, the letter said, mentioning it detected “at least four money laundering schemes.”
Chin, in an email to Bloomberg, said, “I am not the leader of any group, nor do I control or coordinate the individuals referred to, all of whom are independent businessmen and corporate leaders in their own right.” The others in the scheme “do not work for me, and I do not direct their actions.” He also denied any connection to the MACC, other than making complaints through formal channels, which any person can do.
According to Bloomberg, “MACC officials worked with the businessmen with little fear of consequences, according to … eyewitnesses, including two agency employees. They alleged that some of the men, or their associates, were present inside MACC headquarters when executives were taken in for questioning. In two cases, anti-corruption officials took instructions from the businessmen or people associated with them while interviewing executives, according to three of the people. Sometimes the officials proposed that the executives sell their shares to the businessmen at knockdown prices in return for investigations being stopped. In one case, the associates met executives in an interrogation room to discuss a settlement.
A spokesman for the agency emailed Bloomberg that “MACC rejects any suggestion that its investigations are influenced by private interests.” All investigations, the agency said, are conducted in accordance with the law, guided by evidence, and subject to prosecutorial discretion and judicial oversight.” The spokesman said he was responding on behalf of the agency and its officers. Bloomberg was unable to get Azam Baki to respond to requests for an interview.
Small businessman’s shakedown
The Bloomberg story opens with a small businessman named Tau Boon Wee, the owner of a small rubber products maker named GIIB Holdings Bhd, who had just been questioned by the MACC, which was supposedly investigating accounting issues at his company, when he was told a new shareholder wanted to meet later that day at a Kuala Lumpur restaurant. When they met, the supposed new shareholder flashed a pistol tucked into his pants and demanded two board seats at GIIB Holdings.
The gunman, the story said, “is one of a number of businessmen, most of them ethnic Chinese, who have attempted to oust founders of Malaysian companies and sometimes seize control, according to court filings, police records, confidential documents and interviews with more than 20 people who have seen or learned about aspects of their operations.”
The businessmen, it continued, “have a surprising partner: the Malaysian Anti-Corruption Commission, known as the MACC. Officials at the agency are allegedly being used to support the interests of private citizens by threatening, arresting and detaining executives, sometimes recommending charges against them.”
Azam’s previous controversies
The agency’s head, Azam Baki, is no stranger to controversy. Protesters have marched in Kuala Lumpur, calling for him to resign. Anwar himself, then leader of the opposition, once posed for photographs with members of the youth wing of his political party outside parliament, surrounded by placards of dollar bills inscribed with the words “The Republic of Azam.”
In 2021, Malaysian journalist Lalitha Kunaratnam, writing on the Independent News Service website, used public securities filings to show that in 2015, Azam owned shares worth more than RM700,000 (US$179,108 at current exchange rates) in a listed company then known as Gets Global Bhd. Public officials are prohibited from holding shares in a company worth more than RM100,000.
Despite the outcry, authorities took no public action. Azam said one of his brothers had used his trading account to buy shares. The Securities Commission cleared Azam, saying it found no evidence that anyone else had used his account. Then, earlier this month, Bloomberg reported that Azam allegedly owned 17.7 million shares in a firm called Velocity Capital Partner Bhd worth nearly RM800,000. Azam described the report as “malicious and misleading” and instructed his lawyers to issue a letter of demand to Bloomberg.