Analysis: Resurfaced Pandora and Panama papers cast doubt over Malaysia’s probes into Daim and Mahathir’s families
The Malaysian Anti-Corruption Commission (MACC) has cited the Pandora and Panama Papers exposé as basis for their probes into former finance minister Daim Zainuddin and his family, as well as former prime minister Mahathir Mohamad’s son Mirzan. But some are questioning the real motives.
Former Malaysia finance minister Daim Zainuddin (left) and former prime minister Mahathir Mohamad. (Photos: Bernama, Reuters)
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KUALA LUMPUR: As Malaysia's anti-graft probe against the political elite gains traction with the wife of former finance minister Daim Zainuddin being charged on Tuesday (Jan 23), the public outcry over it being fuelled by political motives has also gotten louder.
Some analysts told CNA that the anti-corruption investigations into the family members of Mr Daim and former Malaysian prime minister Mahathir Mohamad must be conducted fairly amid allegations from certain quarters that the probes are part of a political witch-hunt led by Prime Minister Anwar Ibrahim to persecute key members of the camp opposing his government.
The Malaysian Anti-Corruption Commission (MACC) has said publicly that the investigations into Mr Daim and his family, as well as Dr Mahathir’s son, Mirzan, are part of a probe into individuals and entities named in the Pandora Papers and Panama Papers reports.
Mr Mirzan was ordered by MACC on Jan 12 to declare all his assets within 30 days.
Meanwhile Mr Daim’s wife, Na’imah Abdul Khalid, was charged in court under the anti-graft law on Tuesday (Jan 23) for not declaring her assets which includes two companies: Ilham Tower and Ilham Baru, two Mercedes-Benz cars and eight properties.
Mr Daim himself has been asked by MACC to declare his assets in Malaysia and abroad since Jun 7, 2023. The agency said Mr Daim has applied for an extension five times - all of which were granted on Jul 6, Aug 10, Sep 11, Oct 11 and Nov 14 last year.
His refusal to declare his and his family’s financial holdings have led to the seizure of the multimillion-dollar Ilham Tower, a prime commercial building owned by the Daim family, on Dec 21 last year.
The Pandora Papers and Panama Papers are troves of documents, leaked in 2021 and 2016 respectively, that revealed the hidden wealth of world leaders, billionaires and celebrities who used offshore companies to acquire mansions, private jets and stakes in companies.
Mr Daim is among the names of nine Malaysians unveiled in the Pandora Papers while Mr Mirzan was listed in the Panama Papers. Toh Puan Na’imah is not named in either of the papers.
Some observers who spoke to CNA noted that the timing of the MACC investigations is curious given that the papers were leaked some time ago.
Additionally, analysts questioned why the family members of Mr Daim and Dr Mahathir were investigated out of the dozens of names listed in those papers, which also include key figures in Mr Anwar’s ministerial cabinet - Deputy Prime Minister Ahmad Zahid Hamidi as well as Minister of Trade and Industry Tengku Zafrul Tengku Abdul Aziz.
SUSPECT TIMING OF INVESTIGATIONS?
Some politicians have questioned MACC’s explanation that the investigations into both Mr Daim and Mr Mirzan are part of the anti-graft agency’s probe into the Pandora and Panama Papers which began in August 2022.
Senior lawyer and former minister in the prime minister’s department for legal affairs and judicial reforms Zaid Ibrahim told CNA that the time gap between when the documents were published and the fact that the investigations were only conducted recently triggers a legitimate perception that the probes are done selectively.
“It looks like (political persecution) to me because it has been so many years (since the allegedly illegal transactions were done),” said the former United Malay National Organisation (UMNO) member.
Mr Daim had said in the wake of the leak in 2021 that his business dealings, as revealed in the Pandora Papers, were legitimate. He added that he was a “successful and wealthy” businessman long before he entered politics and that taxes had been fully paid for his businesses and income.
Mr Daim who was finance minister from 1984 to 1991 has said that he would have accumulated over RM50 billion (US$ 10.58 billion) in liquid assets had he remained in business instead of taking up public office.
Founder of activist group Center to Combat Corruption and Cronyism (C4) Cynthia Gabriel also questioned the timing of the investigations.
“We ask for more transparency in investigations and ask that MACC be above politics. They must also have the courage to investigate politicians currently in government, and not after they fall from power,” said Ms Gabriel.
Ms Gabriel also said that the fight against corruption should not be selective, giving the example of Deputy Prime Minister Ahmad Zahid Hamidi whose graft charges in court were dropped back in September of last year.
“There is something fishy going on, and the prime minister must know the rakyat (the citizen population) is watching him very carefully,” she added.
However, some analysts defended the timing of MACC’s investigations, and its decision to focus the probe on Mr Daim and Mr Mirzan.
Politics expert Professor James Chin of the University of Tasmania told CNA: “The reason why Daim and Mahathir are being investigated now is because they are in the opposition (camp to PM Anwar). Previously when Mahathir was prime minister it was just not practical that he would investigate himself. Just not possible.”
Dr Mahathir served as prime minister for two terms. The first was between 2003-2018 when he was UMNO chief and the second term was between 2018-2020 as Pakatan Harapan chief.
In a press conference on Monday (Jan 22), Dr Mahathir claimed that Mr Mirzan was being investigated because he was his son.
“My son has to explain his business, his money, his property from 1981, the year I became Prime Minister until now. Not long. Only 42 years. I am quite sure all of you know what you did over the past 42 years,” he said sarcastically.
Mr Anwar had been fired from Cabinet in 1998 following a falling out with Dr Mahathir over the handling of the 1997 Asian financial crisis.
In 1999, Mr Anwar was sentenced to six years' jail for corruption. A nine-year prison sentence was then added in 2000 for sodomy charges, a move he said was aimed to put an end to his political career.
Nusantara Academy for Strategic Research senior fellow Dr Azmi Hassan echoed similar sentiments, saying that he believed that the likes of Mr Daim and his family were being investigated now because they were considered “untouchable” by law enforcement during the era of Dr Mahathir.
“To me it doesn't matter which one of these names are investigated, as long as there is merit to the case. Whether the infringement was done yesterday or two decades ago, if there is merit, it must be investigated,” said Dr Azmi.
Commenting on the MACC investigations, Mr Anwar had said on Jan 20 that the investigations into the political elite were a difficult process and that the government needed to dedicate huge resources.
"We will go after the crooks, I don't care... When we want to take action (against these individuals), the people get angry, saying that this Prime Minister is too harsh. For me, this is strange; you should support it (investigations). It's not easy, you know, to investigate a Tun (the highest civilian honour that can be awarded to a Malaysian.)
"Investigating a village chief is easy. Investigating a school teacher is even easier. I want to investigate the big shots who steal big money. Do you think it's easy? It's not. We want to protect this country; don't let them steal the people's wealth," he was quoted as saying by The Star.
WHY DID MACC TARGET THESE NAMES FROM PANDORA, PANAMA PAPERS?
Some observers also questioned why the MACC had launched investigations into the family members of Mr Daim and Dr Mahathir on the basis that the names of Mr Daim and Mr Mirzan were mentioned in the Pandora and Panama Papers respectively.
They opined that the government should also focus on those who are currently serving in the unity government.
Mr Zaid - who was also involved in the preparation of the framework for the establishment of the MACC when he was law minister - told CNA that comprehensive investigations must be done in the spirit of fairness.
“If you are saying that you are investigating based on these papers, then you must investigate everyone else who has been named as well, across the board,” he said.
Meanwhile Mr Hassan Karim, a Member of Parliament from the same party as Mr Anwar - Parti Keadilan Rakyat (PKR) - published an open letter on his Facebook page on Friday to MACC chief commissioner Azam Baki in which he called for the anti-graft agency to conduct investigations across both sides of the political aisle.
“I would like to commend the MACC for conducting investigations related to revelations in the Pandora Papers and Panama Papers,” wrote the senior lawyer.
“However, I hope that the MACC remains fair and transparent. Investigations should not only target those considered opponents or adversaries of the current ruling unity government but also include supporters and members of the unity government,” he added.
“The MACC must be transparent, professional, and maintain integrity in carrying out its duties based on the principles of fearlessness and impartiality,” said Mr Hassan.
Mr Hassan, who is also a member of one of the MACC oversight panels, lauded the agency’s efforts to combat corruption. However, he alleged that the MACC may have overstepped its duties following Dr Mahathir's public statement that his son Mr Mirzan was threatened with a five-year jail term during questioning.
“I want to emphasise that the MACC is not a prosecutorial body and not a court. The prosecution and sentencing tasks belong to the Attorney-General and the court judges,” wrote Mr Hassan.
Besides Dr Ahmad Zahid and Tengku Zafrul, other notable names listed in Pandora Papers include Selayang MP William Leong who is with PKR and Lim Kok Thay, chairperson of Genting Group.
Meanwhile, names of Malaysians listed in the Panama Papers include Nazifuddin Najib, son of former premier Najib Razak, as well as Fakhri Yassin Muhyiddin, the son of former prime minister Muhyiddin Yassin.
There have been no reports or statements from MACC saying it was investigating either Dr Ahmad Zahid or Tengku Zafrul on the basis that they were listed in the Pandora Papers.
Both Dr Ahmad Zahid and Tengku Zafrul have denied wrongdoing.
In 2021, Dr Ahmad Zahid brushed off his link to an offshore account in the British Virgin Islands revealed in the Pandora Papers information leak, maintaining that he would never evade paying taxes.
The Pandora Papers exposé also revealed that Tengku Zafrul was named as the director of Capital Investment Bank (Labuan) Limited, a boutique bank incorporated in the offshore jurisdiction of Labuan.
Tengku Zafrul has maintained that he held the position of group director and member of the executive management committee of Kenanga Holdings from January 2009 to June 2010.
Capital Investment Bank (Labuan) Ltd was a subsidiary of Kenanga.
On Jan 16, Tengku Zafrul uploaded a video on his social media pages, in which he questioned the rationale of investigating him given that there were hundreds of companies in Labuan and that it would be a gross assumption to make that all these firms were involved in illegal activity.
"Do they want to request that all directors of financial companies in Labuan be investigated by MACC?
"To date, banks in Labuan have almost US$50 billion in assets and insurance companies there also have insurance premiums of up to US$1.7 billion. Are all these assets illegal?" he said.
CNA has reached out to MACC and its chief Azam Baki for comment on allegations of selective prosecution.
PROCESS OF PROSECUTION: FROM DECLARING ASSETS TO BEING CHARGED
Legal experts who spoke to CNA also outlined that MACC must demonstrate that it acts free of any political bias during the course of its investigations into the political elite.
Certified fraud examiner and anti-money laundering specialist Raymon Ram of Graymatter Forensic Advisory told CNA that in navigating these high-profile cases, the government must balance rigorous enforcement with public trust and legal integrity.
He explained that while an individual being named in the Pandora or Panama Papers is significant, he warned that it is not a definitive indicator of guilt or innocence.
He explained that the onus is on MACC to demonstrate any illegal activity linked to these offshore accounts, including predicate offences that may include money laundering.
“The assertion by Tun Daim that his inclusion in the Pandora Papers does not inherently signify wrongdoing is a legally sound defence. The disclosure of names in such documents, though suggestive of involvement in offshore financial activities, does not automatically translate into illegal conduct,” said Mr Raymon.
“It is essential to distinguish between the use of offshore structures for legitimate purposes, such as tax planning or business efficiency, and their use for illicit activities like tax evasion or money laundering.
"In this context, Daim’s claim aligns with the legal principle of the presumption of innocence – a cornerstone of criminal law – which asserts that an individual is considered innocent until proven guilty,” he added.
Mr Raymon outlined that the investigations are typically initiated via revelations or allegations of corruption - in the cases of Mr Daim and Dr Mahathir’s families, the Pandora and Panama Papers are catalysts for MACC to launch their probes.
The next step in the process is to request the accused to declare their assets, both locally and abroad. This is evident in the case of Mirzan Mahathir who is required to declare all his assets as part of the investigation into his Panama Papers involvement and dealings with government-linked companies.
Speaking at the press conference on Monday, Dr Mahathir highlighted that the process of declaring assets - of providing a 42-year history within 30 days - can be onerous and the timeline may not be realistic.
“Of course I am worried. My son told me he received a notice to disclose all his transactions since he was a 20-year-old,” said Dr Mahathir.
“He (Mirzan) has to ask banks, Petronas, the Inland Revenue Board and also has to dig up documents from his old office,” he added.
Following the declaration of assets, Mr Raymon said that the MACC will analyse financial records, transactions, and related documents before submitting a report to the Attorney-General on recommendations towards legal proceedings, including formal charges and trials.
In the case of Mr Daim’s wife, who has been charged, Mr Raymon said that this indicated an “advancement to legal proceedings”.
“It indicates a shift from investigative to prosecutorial phase, suggesting that the MACC has gathered substantial evidence warranting formal charges,” he said.
After she was charged on Tuesday morning, Toh Puan Na’imah issued a statement to reporters reiterating claims that her family was the target of selective persecution.
“The real crime is the coordinated plot to tarnish my husband’s reputation and exact political revenge and retribution against him and our family,” she said.
POLITICAL IMPACT ON ANWAR
Analysts who spoke to CNA supported the move by MACC to investigate the likes of Mr Daim and Mr Mirzan. However, they called for the anti-graft agency to conduct the probes with more fairness and transparency.
Independent political analyst Dr Zaharuddin Sani Sabri told CNA that especially in the investigation process for prominent figures, it is essential that MACC upholds the principles of good governance and the rule of law.
“It is imperative for MACC to maintain an unwavering commitment to its mandate, operating independently from political influences.
“Regular public updates on the progress of investigations, adherence to due process, and involvement of multiple stakeholders can help build trust and ensure that the investigations are perceived as unbiased and legitimate,” he said.
He added that investigations into high-profile individuals will always be subject to scrutiny and criticism.
“While the investigations into these prominent figures may serve to reinforce Anwar's commitment to fighting corruption, they may also backfire if they are perceived as politically motivated or unfairly targeting certain individuals,” he said.
On the other hand, some political analysts outlined that investigations into key figures like Mr Daim and Mr Mirzan are supported by some Malaysians, and represent good optics for Mr Anwar and his pledge to cleanse the political and business sectors of corrupt practices.
Prof Chin told CNA that many Malaysians - especially those living in urban areas - are suspicious of how some members of the political elite like the family members of Mr Daim and Dr Mahathir have amassed wealth over the years.
“I think it is fairly obvious that in any investigations into the higher (echelons) of the political elite - people want to see this happen. Malaysians are more than happy with (probes into) Daim and Mahathir because many have very deep suspicions that these two characters benefited from the political connections,” said Prof Chin.
