Malaysia PM Anwar halts $2b flood projects in widened dragnet, hints Treasury chief will be replaced

KUALA LUMPUR – The Treasury’s top civil servant has gone on leave, even as Prime Minister Anwar Ibrahim reported for duty as Malaysia’s finance minister on Tuesday and widened a dragnet on alleged misappropriation of funds under his predecessors.

Although he walked back on the

RM600 billion (S$186 billion) figure mentioned on Monday

as public expenditure he said was improperly approved when Perikatan Nasional (PN) leader Muhyiddin Yassin was premier from 2020 to 2021, he insisted that “tens of billions were allocated with breaches in procedure”.

Datuk Seri Anwar also ordered the halt of RM7 billion (S$2.2 billion) in flood mitigation initiatives approved by Umno vice-president Ismail Sabri Yaakob, who was prime minister from Aug 2021 to November this year, that were directly awarded without competitive tenders.

“I want to remind Tan Sri Muhyiddin not to challenge this, because it is clear there were several processes and procedures that were not followed and some interested companies or (companies) linked to family were involved,” he told a press conference after clocking in at the Finance Ministry for the first time.

Mr Anwar did not offer details on which companies or whose family were linked to these projects.

The Prime Minister also said the membership and terms of reference of a new advisory team headed by Tan Sri Hassan Marican, the former chief of state oil giant Petronas, would be finalised after “we consult the senior officials and new KSP”.

KSP refers to the Ketua Setiausaha Perbendaharaan, or Treasury secretary-general. The post is currently held by Datuk Seri Asri Hamidin @ Hamidon, who was appointed in April 2020 after Mr Muhyiddin became prime minister.

An aide to Mr Anwar later clarified to The Straits Times that there is no new Treasury secretary-general, but that a deputy would be acting in Mr Asri’s place while he is on leave. The aide did not state why the official was off duty during the first days of the new administration.

Mr Anwar was received by the Finance Ministry’s deputy secretary-generals on Tuesday morning, in Mr Asri’s absence.

Several sources told ST that Mr Asri “has been rested” and put on leave by the new administration, which is also looking to review the much-delayed roll-out of the next generation 5G mobile network, a signature Finance Ministry project launched during Mr Muhyiddin’s time in power. In his capacity as the highest-ranking civil servant in the Treasury, Mr Asri sits on the board of several government-linked entities, including as chairman of Digital Nasional, the state vehicle tasked with building up Malaysia’s 5G infrastructure at a cost of RM16.5 billion.

Umno’s Datuk Seri Tengku Zafrul Aziz was finance minister from March 2020 until the November general election. Umno, which leads the Barisan Nasional (BN) alliance, was part of the governments led by both Mr Muhyiddin and Datuk Seri Ismail and continues to form part of the ruling government now led by Mr Anwar’s Pakatan Harapan coalition.

Mr Zafrul has been reappointed to Cabinet as International Trade and Industry Minister

by Mr Anwar, who presides over a “unity government” that includes all MPs save for the 73 opposition lawmakers in PN. Former premier Muhyiddin had refused to join hands with PH after the Nov 19 polls, insisting he had

the backing of 115 MPs

, despite the palace declaring that no leader had secured a majority in the 222-seat Parliament.

Both former premiers Ismail and Muhyiddin

have denied

that money had gone missing from Covid-19 stimulus packages since 2020, with the latter pointing out that the government’s fiscal injection for the packages was only RM83 billion and not RM600 billion.

Mr Anwar said the flood mitigation projects must be “reviewed so that there will be transparency. The amount in question is big. Although the argument is to resolve flood problems, there must be transparency”.

Mr Zafrul, when tabling the budget in October

under former premier Ismail, had announced a flood mitigation plan for which RM15 billion had been allocated until 2030 as part of a long-term strategy to adapt to climate change.

Parti Islam SeMalaysia deputy president Tuan Ibrahim Tuan Man, who was environment and water minister when these projects were approved, insisted that “all financial monitoring processes were tightly monitored according to” finance ministry guidelines.

“As Prime Minister, he (Anwar) should not presume all directly negotiated tenders are improper. As Finance Minister, I am sure that he knows that direct negotiation for flood mitigation projects that had to be expedited was not a procurement offence,” said the lawmaker from PN.