Malaysia’s anti-graft agency cracks down on former finance minister Daim, seizes his flagship property Ilham Tower

Under the seizure order, the Malaysian Anti-Corruption Commission (MACC) will on paper take control of the US$580 million building, which is located near the iconic Petronas Twin Towers in downtown Kuala Lumpur.

(CNA) – The multi-million-dollar Ilham Tower, a prime commercial building owned by the family of former finance minister Daim Zainuddin, has been seized by Malaysia’s anti-graft agency, sources say, in a sharp escalation to an ongoing probe into controversial transactions by corporate entities previously controlled by the one-time ruling United Malays National Organisation (UMNO).

Financial executives close to Mr Daim, who wielded enormous power during Dr Mahathir Mohamad’s two stints as premier, told CNA that the seizure took place on Thursday (Dec 21), following the former politician’s refusal to submit to petitions from the Malaysian Anti-Corruption Commission (MACC) to declare his and his family’s financial holdings.

The MACC’s move against Mr Daim is part of an anti-money laundering investigation that began in late May into a corporate transaction valued RM2.3 billion (US$500 million) in November 1997 involving publicly listed Renong Bhd and United Engineers Malaysia Bhd (UEM), two entities that were former cornerstones of the business empire tied to the one-time ruling UMNO party.

MACC officials could not be reached for immediate comment and Mr Daim, who served as UMNO treasurer between 1984 and 2001, declined comment for this article.

Financial executives close to Mr 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 Mr Daim rebuffed those demands and had insisted during questioning by the MACC officials that he had nothing to do with the Renong-UEM deal.

Mr Daim maintained that the corporate deal, which involved UEM acquiring a 33 per cent interest in Renong, was purely a corporate transaction between companies that were governed by their respective managements, board of directors and shareholders, financial executives close to the former politician said.

Mr Daim 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 CNA that in early December Mr Daim had received a notification from the MACC that he would no longer receive any further extension, leading to seizure on Thursday of his flagship Ilham Tower.

Under the seizure order, the 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 iconic Petronas Twin Towers in downtown Kuala Lumpur and estimated to have been built at the cost of US$580 million.


Financial executives close to the situation noted that the asset-declaration order in late May came together with the freezing of at least a dozen Daim-related business accounts.

The accounts remain frozen and all payments made for the running of his financial enterprises, including the payrolls, require MACC approval, the executives noted.

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

Shortly after the probe began in late May, the 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 agency added that 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 CNA that the alleged embezzlement of state funds was a direct reference to the RM2.3-billion-ringgit Renong-UEM deal.

The three unnamed personalities are believed to refer to Mr Daim, who served as finance minister between 1984 and 1991; Mr Halim Saad, his long-time business protégé who at the time was a controlling shareholder of both Renong and UEM through a complex web of cross-holdings; and Mr Abdul Rashid Manaf, a prominent Kuala Lumpur-based lawyer who handled all of 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 current premier Anwar Ibrahim was unceremoniously sacked and jailed in September 1998 after falling out with then-premier Dr Mahathir.

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

Many analysts believe that the Renong-UEM deal was a critical flashpoint in the straining of ties between Dr Mahathir and his deputy.

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


Mr 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 bulk of his businesses and assets are held in 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 Mr 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.