Mr Khairy Jamaluddin's tenure as Malaysia's Youth and Sports Minister had been free of scandal until last week, when a division secretary in his ministry was nabbed for allegedly masterminding a scam that siphoned RM107 million (S$36 million) from the ministry since 2010.
The Umno Youth chief, seen as a bright prospect to lead future reforms in the ruling party that has been tainted by decades of corruption scandals, announced yesterday an independent investigation to weed out weaknesses in the ministry he has helmed for three years, that will "ensure such exploitation does not recur".
The syndicate ran for at least six years thanks to a loophole that allowed the division secretary to approve funding for non-existent programmes without authorisation from the minister or the ministry's secretary-general. The 56-year-old official and eight others were nabbed by the Malaysian Anti-Corruption Commission (MACC) on Friday.
"I've asked the Chief Secretary to the Government to establish an independent task force... no officers from KBS (Youth and Sports Ministry), so there are no vested interests," Mr Khairy, 40, told a press conference.
His ministry in the past week had also received some flak due to poor organisation that led to the collapse of the Tour of Sarawak 2016 international cycling race.
Mr Khairy and his predecessor Ahmad Shabery Cheek have denied knowledge of the long-running financial scam. The MACC said the division secretary alone skimmed off at least RM20 million. Items such as luxury cars, watches and handbags were seized from the suspect.
"No, I was not aware," Mr Khairy told reporters yesterday. "The suspect abused procedure which did not require approval from above."
Mr Khairy said he could not comment on matters still being probed by the MACC, including reports that one expenditure under investigation was the refurbishment of the minister's office.
Datuk Seri Shabery was also reported as saying he could not "recall any dealings" with the suspect, as he mostly dealt with the secretary-general, who is the top civil servant in the ministry.
Mr Khairy, acknowledging the negative impact on his ministry, praised the MACC for its "swift action to avoid leakages in government", despite the anti-graft body saying the syndicate could have been operating for decades as the suspect had been with ministry since 1998.
According to the MACC, 14 different companies were paid since 2010 under the scam for programmes that were not executed.
Malaysia's Chief Secretary to the Government Ali Hamsa said yesterday that the secretary-general of a ministry, being the highest-ranked officer, is usually the person in charge of all financial matters, but the issue needs further checks in this scam.
"Basically he is the chief controller. By right, he should know where the money goes to. That's why I want to see whether they (the suspects) went back to the financial controller. We have to wait and see," he told a press conference.