Former Prime Minister Najib Razak and Finance Minister Lim Guan Eng in a file photo. Image: Facebook

SINGAPORE – When Najib Razak became the first former Malaysian prime minister ever to be convicted for corruption, the Pakatan Harapan (PH) opposition coalition that brought the charges against him while in power hailed the verdict as a “big victory” for Malaysians.

Sentenced to 12 years behind bars and fined nearly US$50 million in the first of several cases linked to multi-billion-dollar corruption allegations at the 1Malaysia Development Berhad (1MDB) state fund, the landmark ruling vindicated those who had spoken out against rampant graft as Najib’s scandal-plagued rule lurched toward authoritarianism.

By ostensibly allowing the judiciary to operate independently under his watch, Prime Minister Muhyiddin Yassin managed to allay concerns that charges against Najib and other senior leaders from his United Malays National Organization (UMNO) – a linchpin in the premier’s fragile ruling coalition – would be dropped or subverted.

Opposition lawmakers, however, are raising new questions about Malaysia’s legal process following the August 7 arrest of former finance minister and senior opposition leader Lim Guan Eng, with PH leaders labeling bribery charges leveled against him in connection with a $1.5 billion China-linked infrastructure project as barefaced “political persecution.”

Lim stands accused of soliciting 10% of profits to be earned on an undersea tunnel project in Penang state, which he led as chief minister from 2008 until he was appointed as finance minister in 2018, in exchange for helping a company secure the contract.

At an August 11 press conference, the 59-year-old called the allegations “politically motivated” and “baseless” while maintaining the project went through an open tender.

Two separate courts in Kuala Lumpur and in Penang have charged Lim, who is secretary-general of the Democratic Action Party (DAP), with three separate counts of graft. His wife, Betty Chew, and businesswoman Phang Li Koon, were also slapped with multiple charges this week after respectively being accused of money laundering and abetting Lim.

Serving in the Mahathir Mohamad-led PH government that collapsed in February, Lim was the first ethnic Chinese to helm the finance ministry in over four decades. His appointment was met with resistance among some in the country’s majority ethnic Malay Muslim community.

Malaysia’s former finance minister Lim Guan Eng meets the media in Penang on August 10, 2020 after being charged with what he says are politicized corruption charges. Photo: AFP

Lim had also been a target of stinging social media salvos from Najib, who had also served as finance minister during his 2009 to 2018 tenure and routinely chided his predecessor’s stewardship of economic affairs in lengthy Facebook posts.

“Because the DAP has consistently said UMNO and Najib are up to their necks in corruption, the aim here is to show that the DAP is also involved in corruption, and therefore it is also about sending a message that the DAP is not as clean as they claim to be,” said James Chin, inaugural director of the University of Tasmania’s Asia Institute.

“It is obviously political prosecution. It’s payback, basically,” he added, echoing claims by opposition politicians that the ruling Perikatan Nasional (PN) government, which came to power in March after staging a backroom political coup, has trumped-up charges against Lim as a reprisal for PH’s anti-corruption drive, which ensnared several of UMNO’s top leaders.

The Malaysian Anti-Corruption Commission (MACC) opened investigations into the Penang undersea tunnel project in January 2018, during Najib’s premiership. Zarul Ahmad Mohd Zulkifli, a corporate director from whom Lim allegedly solicited a bribe, was arrested and remanded by MACC for 11 days in connection with the probe but was never charged.

Two Chinese state-owned firms, the Beijing Urban Construction Group (BUCG) and the China Railway Construction Corporation (CRCC), were previously contracted to carry out the project’s design, engineering, procurement and construction work on three expressways and the undersea tunnel, the latter of which is expected to begin construction in 2023.

If found guilty, Lim faces a jail term of up to 20 years and fines of up to five times the value of the bribe. Lim and Phang were previously charged for corruption in 2016 over the purchase of a double-story house, allegedly at below-market rates, but acquitted in 2018 when prosecutors controversially withdrew charges shortly after PH came to power.

“Coming so closely after Najib’s guilty verdict, the charges against Lim may boost Muhyiddin’s image as a fair and just leader…[and] may also appease some of the Malay nationalists who were upset after Lim’s previous corruption charges were dropped in 2018,” said Saleena Saleem, a doctoral candidate in sociology at the University of Liverpool.

The key question, she added, is whether a possible boost in public perceptions of Muhyiddin following Lim’s arrest will help the premier boost the bargaining power of his party, Parti Pribumi Bersatu Malaysia (PPBM), or Bersatu, in shaping the future of its electoral cooperation with UMNO and Parti Islam SeMalaysia (PAS), its Islamist ally.

Malaysian Prime Minister Muhyiddin Yassin unveils his new cabinet members at the Prime Minister’s Office in Putrajaya on March 9, 2020. Photo: AFP/Mohd Rasfan

Bersatu was initially founded in 2016 as a political alternative to UMNO amid allegations of kleptocracy and abuse of power by its top leaders. But political expediency and opportunism saw Muhyiddin’s faction of the party abandon its reformist PH allies in favor of forming an ethnic Malay-based informal coalition, PN, with UMNO and PAS.

Muhyiddin narrowly survived a test of legislative support in Parliament when lawmakers controversially backed his bid to replace the lower house speaker on July 13 by just two votes. With the support of 113 out of 222 lawmakers, PN presides over a fragile governing alliance with the slimmest parliamentary majority in the country’s history.

With Bersatu holding 31 parliamentary seats in comparison to 57 held by UMNO and PAS, barely concealed politicking between PN’s Malay-based parties has been evident since the coalition clinched power, fueling speculation that Muhyiddin’s premiership may be short-lived if his PN allies of convenience opt to abandon him and go it alone electorally.

On July 30, two days after Najib’s guilty verdict was handed down, UMNO President Ahmad Zahid Hamidi, who himself faces 47 money laundering and bribery-related charges, announced his party would not formally join the PN coalition but would instead focus on developing Muafakat Nasional (MN), its loose partnership with PAS.

Zahid’s remarks were a sure sign of spreading fissures within the ruling coalition caused by Najib’s verdict, which analysts say dispelled any presumption among graft-tainted UMNO leaders that ceding the premiership to Muhyiddin would be enough to ensure that those facing charges would be dealt with more leniently than under the previous PH government.

“Support for the Perikatan Nasional government is only based on the backing of UMNO and BN (Barisan Nasional) elected representatives to form the federal government and some state administrations,” he said in a press conference, suggesting that the former ruling party may not support Muhyiddin at the next general election.

Francis Hutchinson, coordinator of the Malaysia Studies Program at Singapore’s ISEAS-Yusof Ishak Institute, sees Zahid’s statement as a pressure tactic by UMNO aimed at demonstrating to Muhyiddin that, “although he personally is popular, his party PPBM is smaller and more vulnerable than either UMNO or PAS.”

Aerial view of UMNO’s assembly meeting, December 7, 2019. Photo: Facebook

At the same press conference, Zahid claimed Muhyiddin had met with lawmakers from Barisan Nasional, a separate coalition helmed by UMNO with allied ethnic minority component parties, to discuss the possibility of Bersatu joining MN, setting the stage for what some analysts see as a potential “reverse takeover” within the ruling coalition. 

“By ‘leaving’ PN, UMNO is now forcing PPBM to join Muafakat Nasional which is under UMNO and PAS’ leadership,” said Hutchinson. “In this coalition, PPBM would be the junior member. This junior status would have implications for the number of parliamentary seats that would be allocated to PPBM to contest in.”

Figures within UMNO have been pressuring Muhyiddin to call an early snap election, though it may not be in his best interest to do so. Meanwhile, UMNO’s leading faction apparently believes that its MN partnership with PAS would be a surefire electoral winner, enabling it to unseat Bersatu as the governing party.

“The perceived electoral successes of the cooperation between UMNO and PAS during the by-elections in 2019 has reinforced the idea for some key party leaders that continued UMNO-PAS cooperation via MN will bear fruit in an electoral contest,” said Saleena. BN candidates have won six out of 11 by-elections since May 2018’s general election.

A survey published in July by Emir Research, a Bersatu-linked think tank, found that 52% of respondents would back an UMNO-PAS pairing in a hypothetical early general election compared with 30% support for PH and 18% undecided. Lower-income earners were twice as likely to back UMNO-PAS than PH, the poll showed.

“What is clear though is Muhyiddin and Bersatu cannot survive on their own without strong party allies, which means PN will not be electorally viable in the near future,” Saleena added. Factions within UMNO continue to be split between those who wish to remain in government versus those who may think it necessary to withdraw, say analysts.

Should UMNO return to power at the helm of a new federal government, Chin of the University of Tasmania’s Asia Institute believes Najib’s convictions would likely be overturned. Lawyers for the ex-premier have said they will file an appeal, a process that observers say could take years to exhaust, during which his guilty verdict will be set aside.

“My prediction is that Najib will not spend any real time in jail over any of these guilty verdicts. He will try to get out of it, either through the appeal system, and as long as UMNO stays in power the possibility of a pardon is always a sort of last option. Everything will depend on his mastery of UMNO politics and obviously his mass appeal,” said the academic.

Politician Anwar Ibrahim waves as he leaves after a press conference at the People’s Justice Party headquarters in Petaling Jaya, on the outskirts of Kuala Lumpur, on February 26, 2020. Photo: AFP/Mohd Rasfan

In the past, Malaysian courts have reversed verdicts on appeals of high-profile cases, most famously with opposition leader Anwar Ibrahim’s first sodomy case, which was reversed in 2004 after a second appeal. Anwar then received a royal pardon relating to his second sodomy conviction shortly after PH’s election victory in May 2018.

“The dominant discourse surrounding Anwar’s conviction previously was that it was a politically motivated move,” said Prashant Waikar, a research analyst with the Malaysia Program at the S Rajaratnam School of International Studies (RSIS) in Singapore. “In Najib’s case, he has sought to present himself as a political victim too.”

What is notable, though, “is that leaders of PAS as well as quite a few UMNO leaders have made it a point to state that they respect the court’s verdict – i.e. they are not questioning the legitimacy of the judgement. They also respect Najib’s right of appeal,” the analyst told Asia Times.

“Ultimately, whether or not a pardon is given – assuming the appeal fails – would probably depend on the extent to which UMNO-PAS believe Najib to have political utility to them. It would also depend on whom the next UMNO president is after the party’s 2021 election and how he views Najib,” added Waikar.

Najib still wields substantial influence over UMNO and its grassroots supporters, and commands the largest social media following of any politician in Malaysia. The guilty verdict bars him from standing as a candidate in the next general election, but he will only be disqualified as an elected representative if the Court of Appeal and Federal Courts uphold his conviction. 

On August 11, Malaysia’s Attorney General’s Chambers appealed the court’s sentencing of Najib in pursuit of heavier penalties against the ex-premier on all seven charges that he was convicted for the misappropriation of 42 million ringgit ($9.8 million) from 1MDB unit SRC International Sdn Bhd.

“The guilty verdict is a severe blow to Najib’s political career, but it is not a knock-out punch,” said Hutchinson. “There are avenues of appeal for these guilty verdicts, which buys time for him. The pace of the various trials will pick up in the months ahead, requiring constant time and financial resources from him. That said, pardons are indeed possible and do happen in Malaysia.”

Asia Times Financial is now live. Linking accurate news, insightful analysis and local knowledge with the ATF China Bond 50 Index, the world's first benchmark cross sector Chinese Bond Indices. Read ATF now.