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Ex-Malaysian Minister Charged with Corruption over Tunnel Project

Hadi Azmi and Nisha David
Kuala Lumpur
2020-08-07
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Lim Guan Eng, Malaysia’s former finance minister and a senior opposition leader, arrives at the Kuala Lumpur Court Complex, where he was charged with corruption tied to the construction of an undersea tunnel in Penang state, Aug.7, 2020.
Lim Guan Eng, Malaysia’s former finance minister and a senior opposition leader, arrives at the Kuala Lumpur Court Complex, where he was charged with corruption tied to the construction of an undersea tunnel in Penang state, Aug.7, 2020.
S. Mahfuz/BenarNews

Senior opposition figure and former Finance Minister Lim Guan Eng accused Malaysia’s government of trying to tarnish him after he pleaded not guilty Friday to a corruption charge tied to a tunnel project in 2011, when he was chief minister of Penang.

Guan Eng appeared in a Kuala Lumpur courtroom where he entered his plea to a charge of soliciting bribes from a company, which was awarded a contract for constructing a U.S. $1.5 billion undersea tunnel project in his home state. He had spent the night in custody following his arrest late Thursday evening by Malaysia’s anti-corruption agency (MACC).

“Let me state that this is a baseless allegation and it is politically motivated to smear my reputation as well as my effort to execute my role as an opposition parliamentarian,” Guan Eng told reporters at the courthouse after appearing before Judge Azura Alwi at the Special Court for Corruption Cases.

“We fight corruption seriously and we do not practice corruption,” he said.

The ex-finance minister next week is expected to face more charges in Penang along with his wife, who was arrested Friday on suspicion of money-laundering in a separate case, officials said. The couple was released after both posted bail on Friday.

According to the charge against him, Guan Eng is accused of soliciting a bribe nine years ago by asking for 10 percent of future profits from the tunnel and highway project, which would connect Penang Island to Peninsular Malaysia, from a company owned by Zarul Ahmad Mohd Zulkifli. The project is still under construction.

Judge Azura Alwi fixed bail at 1 million ringgit (U.S. $238,700) for Guan Eng and ordered him to surrender his passport. She allowed him to pay half of the amount on Friday and the rest on Monday.

If convicted, the former finance minister could get up to two decades in prison and a fine of five times the value of the gratification he allegedly solicited through the bribe, prosecutors said.

“This offense carries a jail term of up to 20 years and there lies every possibility of one absconding,” said Wan Shaharuddin, an attorney with the prosecution.

Guan Eng’s chief counsel, Gobind Singh Deo, questioned the timing of the case brought against his client by the Malaysian Anti-Corruption Commission.

“This is a charge which relates to an incident alleged to have happened in 2011, some nine years ago, so of course we all know that there have been investigations,” Singh said.

“The MACC has done investigations before but this has never been something that they have taken up.”

Meanwhile, Guan Eng’s wife, Betty Chew Gek Cheng, was expected to appear at the Butterworth Sessions Court in Penang on Tuesday, after she was taken into custody by MACC officials in the state, according to her lawyer, Lee Khai.

“She will be charged under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act (AMLATFPUAA) 2001,” he told BenarNews.

According to Lee, the case against Guan Eng’s wife was not connected to the tunnel project.

Lee also confirmed that his client was released after posting a 50,000-ringgit ($11,900-) bail to the MACC. She was arrested on Friday morning along with a businesswoman, Phang Li Koon.

According to a senior official in MACC, who declined to be named because he was not authorized to speak to reporters, Phang was also released on bail.

The two women and Guan Eng are to be charged in court in Penang on Tuesday, in connection with the purchase of a bungalow at below-market value, and which was part of an alleged land swap-deal on the island, the source told BenarNews.

“Lim will be charged with soliciting and bribing, the wife with money laundering and Phang for abetment,” the source said.

Mahathir forms new party

Guan Eng, the secretary general of the opposition Democratic Action Party (DAP), served as finance minister in the Pakatan Harapan government, which was elected in May 2018 on a platform of ridding government of corruption in the wake of a financial scandal involving the theft of billions of dollars from 1MDB, a state investment fund.

However, the ruling alliance headed by Mahathir Mohamad collapsed in late February amid infighting. A new unelected government came to power in early March and is anchored by the party of former Prime Minister Najib Razak, who was convicted last week on corruption charges related to the 1MDB affair.

The 4.47-mile (7.2-km) tunnel project was started in 2016 under Najib’s government as a third connection between Penang Island and the rest of the state on the mainland. Set for completion in 2025, it will be the first undersea tunnel in Malaysia.

In other news in Malaysian politics on Friday, Mahathir announced that he and his son were forming a new party but that would not be aligned with the opposition or ruling blocs, a move which he indicated was aimed at splitting the vote among the ethnic Malay majority.

Mahathir, 95, and his son, Mukhriz, were both kicked out of the Bersatu party, which is headed by the current prime minister, Muhyiddin Yassin, who formed a new government after quitting Pakatan in February.

“It’s a new party, neither PH nor PN,” Mahathir told a news conference, referring to Pakatan Harapan and the ruling Perikatan Nasional bloc. “[W]e are free to work with other parties that we think can work with us.”

“Yes, it will break the electorate. I don’t like it but we need to do it,” he said. In the past, he added, Malay-based parties, including the United Malays National Organization (UMNO) “under a different leader, always got a two-thirds [parliamentary] majority, but now the party is bad.”

Najib is a member of UMNO and Mahathir headed the party when he first served as prime minister from 1981 to 2003.

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