THE Malaysian Anti-Corruption Commission (MACC) has reportedly seized the multi-million-dollar Ilham Tower, a key commercial property owned by the family of ex-finance minister Daim Zainuddin, Chanel News Asia reported. This marks a significant escalation in the ongoing investigation into contentious transactions involving corporate entities once under the control of Umno.

Close associates of Daim,  who held considerable influence during Dr Mahathir Mohamad’s terms as prime minister, told the news website that the seizure occurred today.

This action followed Daim’s alleged refusal to comply with petitions from MACC regarding the disclosure of his family’s financial holdings. It is also a component of an anti-money laundering inquiry initiated in late May.

This investigation focuses on a corporate transaction worth US$500 million (RM2.3 billion) in November 1997, which involved publicly listed Renong Bhd and United Engineers Malaysia Bhd (UEM). Both entities were previously integral components of the business empire associated with Umno.

MACC officials could not be reached for immediate comment and Daim – who served as Umno treasurer between 1984 and 2001 – declined to comment.

Financial executives close to Daim said that the former politician received an order from the MACC in late May to declare his financial holdings and other assets belonging to members of his family.

But Daim rebuffed those demands and had insisted during questioning that he had nothing to do with the Renong-UEM deal.

He asserted that the corporate deal, where UEM acquired a 33% interest in Renong, was solely a business transaction between companies.

Financial executives close to the former politician stated that these transactions were governed by the respective managements, boards of directors, and shareholders of the involved companies.

He also sought extensions to furnish details on his financial holdings and requested that the agency disclose the reasons behind the asset declaration petition, including the alleged offences he was being investigated under.

Sources told Chanel News Asia that in early December, Daim received a notification from MACC that he would no longer receive any further extension, leading to the seizure of Ilham Tower today.

Under the seizure order, MACC will take control of the property on paper.

The building is located in a cluster of prime commercial and high-rise residential properties around the Petronas Twin Towers in Kuala Lumpur and is estimated to have been built at the cost of US$580 million.

Sketchy information

Financial executives familiar with the matter observed that the asset-declaration order in late May coincided with the freezing of at least a dozen business accounts associated with Daim.

The accounts continue to be frozen, and any payments related to the operations of his financial enterprises, including payrolls, necessitate approval from the MACC, according to the executives.

The MACC has been sketchy with information on the Renong-UEM deal.

Shortly after the probe began in late May, MACC released a statement that the agency was gathering information into the “alleged embezzlement of state funds amounting to an estimated RM2.3 billion”.

The commission said it had frozen bank accounts with funds amounting to RM39 million belonging to an unidentified former senior minister and two businessmen, who were also not identified.

Government officials and anti-graft investigators directly involved in the probe told Chanel News Asia that the alleged embezzlement was a direct reference to the RM2.3-billion-ringgit Renong-UEM deal.

The three unidentified figures are believed to include Daim, who served as finance minister from 1984 to 1991; Halim Saad, his longstanding business protégé and a controlling shareholder of Renong and UEM through intricate cross-holdings at the time; and Abdul Rashid Manaf, a prominent Kuala Lumpur-based lawyer responsible for overseeing Umno’s corporate affairs.

The MACC’s move to revisit a transaction that happened over 26 years ago has stirred widespread speculation that the ongoing investigation has a strong political dimension and is steeped in the country’s troubled and messy politics, particularly over how Prime Minister Anwar Ibrahim was unceremoniously sacked and jailed in September 1998 after falling out with then-premier Dr Mahathir.

Anwar, who replaced Daim as finance minister in 1991 and had risen to become deputy prime minister, was hugely critical of the Renong-UEM deal at the time, which caused a meltdown in the Malaysian stock market.

Analysts believe that the Renong-UEM deal was a critical flashpoint in the straining of ties between Dr Mahathir and Anwar.

With a business career that stretches back to the late 1960s, Daim, a lawyer by training, is widely regarded in Malaysia’s business and political circles as one of the country’s richest personalities.

Stealthy approach

Daim has always applied a stealthy approach to his business empire.

He does not appear in any listing index of the region’s richest businessmen because a large portion of his businesses and assets are held through an array of obscure family companies or nominee associates.

He is not listed as a substantial shareholder or a director in any quoted Malaysian company.

The most visible construct of Daim’s financial heft is the 60-storey Ilham Tower, which was completed in 2015 and houses both offices and a hotel.

According to documents lodged at the Companies Commission of Malaysia, the owner of the building is a private entity called Ilham Tower Sdn Bhd, which is in turn majority owned by a private company called Ilham Baru Sdn Bhd.

It is a company controlled by members of Daim’s family, including his wife Na’imah Abdul Khalid and his two sons, Mohammed Amin Zainuddin Daim and Muhammed Amir Zainuddin Daim. – The Malaysian Insight, December 21, 2023