Biggest Money Corruption in Malaysia to Ever Happened

When you talk about corruption one thing that will come to your mind is the word money and power. It seems that these 2 words correlate very well with each other and the money and power we have now are never enough.


That's why cases involving the 1 Malaysia Development Berhad or known as 1MDB can be considered the biggest scandal to ever happened in Malaysia and the United States are also involved in this.

The person known as the number 1 person in Malaysia was believed to be the mastermind behind all of this. The estimated loss was in the range of billions of dollars!

But do you also know that 1MDB is only part of the scandal stories of Malaysia and there are also other money scandals that have happened before this? Some of you might not have even been born yet when it did happen.

1) Maminco Scandal 1981

Malaysia used to be the biggest producer of lead in the world back then in which it producing 31% of the world's lead. Not just that, but lead is also one of the biggest contributions to the Malaysian economy since it is considered one of the country's biggest exports.

Therefore, in order to control the price of lead in the market a new company called Maminco Sdn. Bhd. was established. What this company does is it will make hoax purchases in a contracted manner.

This is done so that the price of lead remains high due to increasing demand. To make this purchase Maminco has decided to take a loan from Bumiputra Bank (now CIMB) worth RM1.5 Billion(approx. $350k USD).

At the start, their strategy started to work but due to the price not being controlled, other countries have decided to sell the lead at an even lower price causing the price of lead to drop.

Maminco did not manage to pay back the loan that they took and this has caused the country to lose huge amounts of money.

2) Perwaja Steel 1992

Perwaja Steel was founded as an initiative of promoting the industrial economy in Malaysia. As a starter, they have made a partnership with another company from Japan called Nippon Steel Corporation.

But things started to go south when Perwaja Steel had troubles with their manufacturing factories as well as their operation which resulted in Nippon Steel withdrawing from their partnership deal. This has made matters much worse when Perwaja Steel is burdened with loads of debts up to RM1 billion (approx. $235 million USD).

In order to save this company, the government has decided to support RM2 billion which was obtained from the Bumiputra Bank and Employee Provident Fund. However, the company did not survive in the end to the extent that the company was forced to sell all its assets to pay off all the debts that they have incurred.

3) Port Klang Free Zone(PKFZ) Scandal 

The Port Klang Free Zone was an idea of the former minister of transportation, Tun Dr. Ling Liong Sik at that time. The PKFZ was established to encourage an increment in the amount of cargo going into Port Klang. This will indirectly improve the country's economy aside from providing more jobs to the people.

Ever since it was launched, PKFZ received a lot of attention from many investors not just in the country but also across the globe. Some people, however, speculate that the PKFZ project was merely a scandal since the cost of making the project has risen by a considerable amount from the original cost which was RM1.1 billion(approx. $250 million USD).

After a process of auditing in 2008. it was found that the whole cost of the project was roughly RM12.5 billion! The difference is too far off from the expected cost.

4)Bumiputera Malaysia Finance(BMF) Scandal

This scandal involved one of the conglomerate companies of the Bumiputera Bank which is considered the country's first biggest money scandal. This case has gotten the attention of many international media since it involved murder, as well as the company itself, based in Hong Kong.

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In the year 1983, BMF approved the biggest loan ever to the Carrian Group which is based in Hong Kong. The problem with this company is that its current records are rather doubtful and skeptical. Carrian Group was then unable to pay back its loan to the BMF.

BMF then sent their officers to Hong Kong to do an audit regarding this case. Unfortunately, the officer whose name is Jalil Ibrahim was killed on sight during the investigation. But before his death, he was able to send proof of misconduct in the process of approval of the loan.

The case went on for as long as 17 years in Hong Kong and the Malaysian government was forced to pay billions of ringgit in order to compensate for the loss of BMF. 

5) Currency Trading of the Malaysian Central Bank(MCB) Scandal

In the early 90s, the central bank of Malaysia was once involved in the forex exchange. What was done by the central bank was that they will buy other countries' currencies in a huge amounts in just one day.

This will automatically influence other investors to also buy those same currencies which will increase the value of the currencies even more. The MCB will then sell all those currencies at a higher price.

However, at one time the MCB decided to buy Pound Sterling in a very large amount expecting that the currency will increase even more. But the opposite actually occurred and this has caused the MCB to lose more than RM30 billion! (approx. $7 billion USD).

In the year 2017, the Royal Commission of Inquiry was founded in order to investigate the case involving the huge loss of the MCB in the forex exchange in accordance with the law.

But the person behind this huge scandal was never revealed since the government has withdrawn the police report made by the RCI and the case was classified as NFA(No Further Action).

6) 1Malaysia Development Berhad(1MDB)

Who doesn't know about the infamous 1MDB scandal right, as it involves many Hollywood stars as well as Malaysia's number 1 most important person? 1MDB is a strategic company fully owned by the government of Malaysia through the Ministry of Finance. 

1MDB was established as an initiative to improve the country's economic development in the long term. It is to encourage many foreign investments as well as any foreign aid.

The controversy starts to arise when a businessman from Penang known as Jho Low, has a strong relationship with the stepson prime minister at the time who was the stepson of Dato Seri Mohd Najib Razak, Riza Aziz. With the help of Riza Aziz, Jho Low was able to siphon $700 million USD from the business consensus between 1MDB and the biggest oil company in the world, PetroSaudi.

It can be said that Jho Low was able to get the approval of a loan confirmed by the Prime Minister worth US$1 billion without getting the approval of the Central Bank first.

Aside from that, there was also a sum of money found worth $700 million USD that was transferred to a savings account which was AmBank and Affin Bank in which both the owner of the account Dato Seri Mohd Najib Razak.

As of now, Malaysia has managed to gain back $322 million of the 1MDB assets from a total of $4.5 billion which was believed to be stolen from 1MDB.

Source: Majalah Labur

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