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Malaysia: Ex-Finance Minister Arrested over Suspected Corruption in Tunnel Project

Hadi Azmi
Kuala Lumpur
2020-08-06
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Lim Guan Eng speaks to reporters at the Finance Ministry in Putrajaya in June 2018.
Lim Guan Eng speaks to reporters at the Finance Ministry in Putrajaya in June 2018.
Hadi Azmi/BenarNews

Lim Guan Eng, a former finance minister and senior leader of Malaysia’s opposition, was taken into custody Thursday night on suspicion of alleged corruption tied to a U.S. $1.5 billion undersea tunnel and highway project, the Malaysian Anti-Corruption Commission announced.

In a statement, the MACC said it had received permission from the attorney general to bring charges against Guan Eng, who previously served as Penang state’s chief minister from 2008 to 2018, over allegations of soliciting or receiving bribes and of abusing his position for personal gain. He is scheduled to appear before the Special Corruption Court in Kuala Lumpur on Friday and the Penang Sessions Court on Monday to be charged.

“Both charges in the Kuala Lumpur and Penang courts are related to the Penang undersea project,” MACC said in its statement.

A MACC source who said he was not cleared to speak to the media confirmed Guan Eng’s arrest.

“Yes, he was arrested at 9:30 p.m. and is to be produced in court in the morning,” the source told BenarNews.

MACC also said that Guan Eng, the secretary general of the opposition Democratic Action Party (DAP), was to appear Tuesday in Penang Sessions Court to face another charge of abusing his position for personal gain from a different case, but did not release details about the case.

If convicted, Guan Eng faces a maximum prison sentence of 20 years with fines of five times the amount of gratification under both sections.

The 4.47-mile (7.2-km) tunnel project was started in 2016 under former Prime Minister Najib Razak as a third connection between mainland Penang and Penang Island. Set for completion in 2025, it would be the first undersea tunnel in Malaysia.

Liew Chin Tong, a senator and DAP Central Executive Council member, questioned why Guan Eng was taken into custody.

“MACC could have just informed our secretary general, Lim Guan Eng, to be present at the courtroom at a certain time. There is no need to keep him overnight, he won’t run away,” Liew said in a statement.

Former Prime Minister Mahathir Mohamad appointed Guan Eng as finance minister shortly after the May 2018 election upset of Najib’s coalition. Mahathir’s Pakatan Harapan coalition campaigned on a pledge to rid the government of corruption and bring to justice those involved in the 1Malaysia Development Berhad (1MDB) scandal.

Within weeks of taking the lead at the finance ministry, Guan Eng on July 5, 2018, announced the suspension of Chinese-backed rail and pipeline projects, citing concerns over combined costs estimated to run as high as the U.S. $23 billion.

He suspended the East Coast Rail Link (ECRL) and the two pipeline projects after seeking advice from then-Attorney General Tommy Thomas and after Mahathir had announced the government needed to get the national debt left by Najib’s administration under control.

“The decisions are solely directed toward the related contractors relating to provisions mentioned in the agreements, and not at any particular country,” Guan Eng said at the time.

He said the ECRL cost had increased by $6.4 billion to $20 billion.

In September 2018, the Penang High Court cleared Guan Eng of two counts of corruption brought by Najib’s government over his 2015 purchase of a bungalow at well below market value.

In August 2019, Mahathir announced that Malaysia had recouped more that $243 million from a Chinese state company for the unfinished pipelines. He also announced construction of the ECRL was resuming after negotiations with China slashed the construction cost by about a third.

Two years earlier, Najib called the ECRL a game changer. He led Malaysian efforts to develop the project as part of China’s One Belt One Road initiative to connect it to nations in South and Southeast Asia and beyond through ports, roads, railways and trade routes.

Najib responds

The former prime minister posted accusations against Guan Eng regarding the tunnel project on his Facebook in December 2019.  Following the news of Guan Eng’s arrest, Najib on Thursday again shared the post with his 4.2 million Facebook followers.

“I am again sharing their slick method to gain tens of billions of ringgits,” wrote Najib who faces his own legal woes because of the 1MDB. “(The post was shared) 10,000 times since I wrote it in December but it was not even once disputed by the DAP.”

Najib was found guilty last month of seven counts involving abuse of power, criminal breach of trust and money laundering over the looting of millions of dollars from SRC International, a subsidiary of the sovereign wealth fund 1MDB. A Kuala Lumpur High Court judge sentenced him to 12 years and fined him 210 million ringgit (U.S. $49.3 million).

The former prime minister, who faces a total of 42 criminal charges, is standing trial in another court on 25 corruption charges in the 1MDB scandal.

Najib established 1MDB in 2009 when he was prime minister and finance minister, saying it would benefit the Malaysian people. U.S. and Malaysian officials alleged more than $4.5 billion was diverted from 1MDB through fraudulent shell companies to Najib and his associates, according to the U.S. Justice Department.

Nisha David in Kuala Lumpur contributed to this report.

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