‘Each day a new discovery’: Daim probe set to implicate more corporate personalities including Singapore businessman
The probe into former finance minister Daim Zainuddin — widely considered to be one of Asia’s least-known billionaires — is turning into the Malaysian Anti-Corruption Commission’s single-largest anti-graft investigation to date. It is slowly providing a glimpse into a hydra-like business empire.
KUALA LUMPUR: When finance czar Daim Zainuddin finally complied with repeated demands from the Malaysian Anti-Corruption Commission (MACC) to declare his financial assets last month, he submitted his ownership of an international financial group known as ICB Group, which is incorporated in Switzerland, and a handful of personal bank accounts.
It did not tally with a still-growing list that the agency had assembled, which included equity holdings in publicly listed and private entities held by known business proxies that have been on the radar of the agency in the months-long probe into his affairs.
On Monday, a frail Daim appeared at a Malaysian court in a wheelchair and was charged with failing to declare assets involving 38 companies, 25 properties and several luxury vehicles.
His day in court came a week after his wife Na’imah Abdul Khalid was charged with similar offences. Both have pleaded not guilty.
“The list of assets in the charge sheet is just the tip of the iceberg of Daim’s wealth,” noted a senior government official involved in the ongoing probe.
The case, which investigators noted included analysis of the 85-year-old Daim’s “net worth and source of funds”, is also spreading to other high-profile business personalities, including the children of former premier Dr Mahathir Mohamad, Mirzan and Mokhzani Mahathir, who have also been ordered by the MACC to make asset declarations.
The MACC sources said the agency will be summoning suspected business associates and financial proxies of Daim for questioning in the coming days and all of them would be required to make asset declarations. The officials did not rule out more charges against the former finance minister.
“This is the most extensive investigation since 1MDB,” said the government official, referring to the debacle at state-owned 1Malaysia Development Bhd (1MDB) that led to the conviction and subsequent jailing of former premier Najib Razak on charges of corruption and money laundering.
POLITICAL DIMENSION THAT DATES BACK TO LATE ’90S
The probe has also taken a very potent political dimension.
In a statement delivered after he posted bail of RM280,000 (US$59,215) on Monday, Daim accused Prime Minister Anwar Ibrahim of carrying out a political vendetta against him.
“A wolf in sheep’s clothing who cries reforms, but does the polar opposite. I am not too bothered about my fate now, let Anwar throw everything at me,” he said.
Daim evokes strong feelings among ordinary Malaysians and the business community.
While widely credited as the architect of Malaysia’s economic model, there is general disquiet over what is widely perceived as his cavalier attitude towards conflicts of interest between his public and private roles.
One of the most controversial episodes occurred in the mid-1980s, when his family quietly completed the purchase of the then-third largest bank, known as United Malayan Banking Corporation Bhd (UMBC), several months after Daim had been installed as finance minister.
In the political uproar after the transaction was disclosed, he sold the stake back to the state-owned concern from which it had been acquired.
The anti-graft investigations into the financial affairs of Daim represent one of the most audacious moves by Mr Anwar in his pledge to clean up the government.
It is set to bring focus to the extended period of political and economic uncertainty following the regional financial crisis that began in mid-1997, which resulted in several controversial cross-border corporate exercises and financial bails of troubled companies that Daim and then-premier Dr Mahathir presided over.
Mr Anwar was sacked in September 1998, charged and convicted of corruption and sexual misconduct before being sentenced to long jail terms in a bruising political conflict that the current premier has long maintained was part of a political conspiracy because he was becoming a threat to Dr Mahathir’s leadership.
Now, the ongoing MACC investigations into Daim are stirring speculation that the bad blood between the two politicians that spiralled intoThe investigations into Daim began in late May 2023 when the MACC decided to revisit a controversial corporate transaction valued at RM2.3 billion (US$500 million) in November 1997 involving publicly listed Renong Bhd and United Engineers Malaysia Bhd (UEM), two entities that represented the combined business flagships of the one-time ruling United Malays National Organisation (UMNO).
In that deal, the cash-rich UEM was forced to pay a substantial premium for Renong, which was struggling under a debt burden of RM4.12 billion ringgit.
MACC investigators believe that Daim, then UMNO’s treasurer, played a key behind-the-scenes role in that deal that caused a meltdown in the stock market at the time because it was widely perceived to be a bailout by cash-flushed UEM of Renong and unidentified investors of the stock.
MACC investigators are also dialling back to another cross-border corporate exercise involving the now-defunct trading platform called the Central Limit Order Book, or CLOB, and the takeover of a large conglomerate called Multi-Purpose Holdings Bhd, which at the time was controlled by a businessman with close ties to Anwar.
Both cases, which are now under the MACC’s scrutiny, directly involve Singaporean businessman Akbar Khan, a long-time Daim acolyte who is now a person of interest in the widening probe.
Singapore set up CLOB in 1990 after Kuala Lumpur banned the trading of stocks in Malaysian companies on the Singapore exchange.
Eight years later, the trading platform emerged as a serious loophole in Malaysia’s imposition of capital control to halt rampant foreign speculation on the local currency.
Just days before Mr Anwar was sacked from government in late September 1998, Malaysia imposed capital controls, fixed the local currency at RM3.80 against the US dollar, and banned the trading of Malaysian stocks outside the country. The move effectively froze billions of dollars worth of stock in 112 Malaysian companies that were trading on CLOB.
Mr Akbar not only won a lucrative concession awarded by the Malaysian finance ministry, which at the time was headed by Daim, to operate a lucrative concession to manage the return of the frozen equities that were estimated to be roughly US$4 billion. He also secured the blessing of the then-finance minister to take over conglomerate MPHB, which held stakes in banking, property, gaming and shipping.
Government sources noted that Mr Akbar, who currently controls one of the country’s top real estate entities, Bandar Raya Development Bhd (BRDB), is on the list of personalities MACC is set to call for questioning in the coming days and will be asked to make a declaration of his financial holdings. Mr Akbar did not respond to CNA’s request for comment.
ONE OF ASIA’S WEALTHIEST?
Daim is not listed in any catalogue or index of Asia’s wealthiest businessmen. But bankers in both Singapore and Malaysia believe that Daim, who served two stints as finance minister – from 1984 to 1991 and from 1999 to 2001 – sits in the same league as other Asian tycoons such as Robert Kuok and Li Ka-shing.
Apart from a handful of bank accounts, Daim’s asset declaration to the MACC included his equity holdings in the Switzerland-incorporated financial grouping ICB, which was previously known as International Commercial Bank.
It is a curious financial grouping with branches in Eastern Europe and Africa. When it began operations in the mid-1990s, ICB had branches in non-traditional financial centres, such as Prague, Budapest, Sarajevo, Tirana, Accra, Conakry, Dar es Salaam and Maputo.
Now, MACC investigators are discovering a hydra-like business empire, fronted largely by business proxies who represent his interest in dozens of private and publicly listed companies in Malaysia and abroad. Among the listed companies tied to Daim include property concern Plenitude Bhd, investment holding concern Langkah Bahagia Bhd, and Kejora Harta Bhd.
“Each day of the (Daim) investigation is a new discovery,” noted the senior government official involved in the probe.##.