PRIME Minister Dr Mahathir Mohamad’s vow to take down those involved in the 1Malaysia Development Bhd scandal can be kept only if he is willing to ruffle the feathers of the business elite, reported The Wall Street Journal.

While Pakatan Harapan is said to have won the May 9 polls in large part due to Malaysians’ anger at the widespread corruption in the Najib Razak administration, the report said there is doubt as to whether Dr Mahathir will scrutinise businesses too closely in the fight against graft, as Malaysia’s economy, rocked by volatile commodity prices, needs investments.

Among the major companies with links to the troubled state investor are conglomerates Tanjong PLC and Genting Group, which WSJ said enjoyed a “quid-pro-quo relationship” with 1MDB and former prime minister Najib, who founded the state fund.

In 2012, Tanjong and Genting sold power assets to 1MDB. Genting then recorded extraordinary gains, implying that the value of the assets sold was much less than what had been paid.

In the 2013 fiscal year, 1MDB recorded an impairment of RM1.2 billion on part of the premium it had paid in the sale, according to the fund’s financial statements.

Some months afterwards, a Genting subsidiary donated US$10 million (RM40 million) to a charity linked to Najib, WSJ said, quoting a company spokesman.

Firms owned by Ananda Krishnan, who controls Tanjong, also donated to the charity – to the tune of US$135 million.

The report said a rigorous sweep will also involve looking into state-linked companies, which make up more than a third of the local stock market by value. Some of these agencies, too, are rocked by their own scandals.

It cited the Federal Land Development Authority (Felda), which, via a subsidiary, had bought a stake in an Indonesian palm oil firm at an inflated price from Jakarta-based billionaire Peter Sondakh.

Banking group AMMB Holdings Bhd allegedly played a part in the 1MDB affair, too, with the US Department of Justice saying US$681 million in the state investor’s funds had been transferred into Najib’s personal accounts with the bank.

Following PH’s 14th general election triumph, the former prime minister is under police and Malaysian Anti-Corruption Commission investigation over allegations of graft and other wrongdoings related to 1MDB.

A private plane owned by one of Sondakh’s firms was chartered days after Najib’s election loss for what the PH government has said was a thwarted attempt to flee Malaysia.

Najib, who has been barred from leaving the country, and 1MDB have repeatedly denied any wrongdoing.

Dr Mahathir, on the other hand, has been accused of helping form a union between big business and the political elite during his first tour as prime minister. He is said to have frequently awarded government contracts to allies – a practice continued by Najib.

Dr Mahathir had used state companies to uplift Bumiputeras, who traditionally lagged behind the more affluent Chinese. This boost gave rise to a class of industrialists that benefited from the privatisation of government firms, which financially backed the then ruling Barisan Nasional.

He has since admitted to mistakes in his past, saying his comeback to politics is because he has the nation’s interests at heart.

There is still optimism, however. The report said analysts believe that a clean-up, especially of government-linked companies, could open up the markets to more competition.

And, they said, Malaysians can hope to see the return of money from their countrymen who had fled overseas to escape corruption and affirmative-action policies. – May 24, 2018.