Why Malaysia PM Anwar’s invoking a Zionist bogeyman and a plot to topple the government

KUALA LUMPUR – The family of a dead former finance minister, Zionists, the Bloomberg news agency, civil society figures, academics and even a podcaster.

This is the unlikely cast of those hauled up by the police in their investigations into a supposed plot to topple Prime Minister Anwar Ibrahim’s government by “undermining democracy” in Malaysia.

According to Datuk Seri Anwar, the conspiracy involves attacking the “credibility of the system and institutions” in Malaysia and “sabotaging the government”.

He told Parliament on March 3 that a “Zionist” public relations firm planted reports – including recent articles from Bloomberg – alleging widespread abuses by the Malaysian Anti-Corruption Commission (MACC), especially in manipulating corporate decisions.

The Prime Minister has refused calls for a public inquiry into the anti-graft agency and its embattled chief Azam Baki, preferring an internal task force led by Attorney-General Dusuki Mokhtar, who has himself been accused of making politically motivated decisions.

What is the MACC accused of?

In February, Bloomberg published two articles, the first detailing how Tan Sri Azam breached the RM100,000 (S$32,600) cap of shareholdings in any company for civil servants. Local news portal Malaysiakini also followed up with further evidence that he owned excessive stakes in other companies.

Former economy minister Rafizi Ramli claimed on March 13 that the probe led by the Attorney-General found that the anti-graft chief held RM14 million in shares across nine companies.

A second Bloomberg report alleged that MACC officers abused their wide-ranging powers to collude with businessmen as part of a “corporate mafia” to seize control of companies worth millions.

Neither of these allegations are new.

Mr Azam was first accused of irregular shareholdings in 2021, while The Straits Times and some blogs have also raised concerns over claims of abuses in the MACC to extort and manipulate corporate figures. But it took one of the world’s biggest news companies to put out in-depth reports to its clients around the world to shake the corridors of power in Putrajaya.

What are critics of the MACC calling for?

There are two key demands. One is for Mr Azam to be suspended pending investigations, and the other is for a Royal Commission of Inquiry, Malaysia’s highest level of public inquiry into issues of national interest, to be formed to look into the allegations of misconduct in the MACC.

The calls for a royal commission come from several quarters, chiefly the Democratic Action Party (DAP), which contributes the most MPs to the Anwar administration.

So far, neither demand has been met, with Mr Anwar insisting that “due process” be respected by allowing the task force to present its findings to the Cabinet before deciding on a royal commission. But the report on the findings has instead been handed to the head of civil service for further action; he confirmed receiving it on March 10. The task force also looked only into the shareholding issue and not the so-called “corporate mafia” claims.

Who is being investigated instead?

On March 11, government spokesman Fahmi Fadzil said at a post-Cabinet press conference that enforcers such as the police, Securities Commission, Inland Revenue Board and the MACC itself began probes into the “corporate mafia” allegations “a few years ago”.

Little is known about these probes.

In 2023, the police said they had been looking into such claims involving the MACC and supposed mastermind Victor Chin, a businessman whose dealings have intersected with those of Mr Azam and corporate figures close to Mr Anwar.

On March 16, Mr Chin’s home was raided by the Securities Commission and police. He has insisted that “there exists a corporate mafia in Malaysia, but I am not a corporate mafia”.

Instead of investigating Mr Azam, the police have focused on a supposed plot to overthrow the government, with prime suspects being the widow and children of the late Tun Daim Zainuddin, Malaysia’s former finance minister. His family had engaged Britain-based foreign public relations firm Teneo to rehabilitate his image after he was charged with failure to declare his assets in January 2024.

Mr Daim was acquitted after the prosecution withdrew the case a week after his death at the age of 86 in November 2024, even though his lawyer and family wanted the trial to proceed so that his name could be cleared.

The Daim family and Teneo plan to tarnish the MACC and Mr Anwar’s anti-corruption drive, allege the Prime Minister and a reporter who lodged a police report.

But critics – including opposition figures such as former premier Muhyiddin Yassin, Mr Daim’s family and former prime minister Mahathir Mohamad – have described this allegation as a front by the Prime Minister to persecute opponents.

The police have hauled up 14 people for questioning in relation to the “plot”, and plan to double that number. Sources told ST that those questioned were targeted simply because they were named in correspondence between Teneo and the Daims as potential talking heads in a media plan that included engaging various foreign media outlets such as Bloomberg.

They range from opposition MP Wan Saiful Wan Jan, political science professor Syaza Shukri, former UMNO leader-turned-podcaster Shahril Hamdan and Center to Combat Corruption and Cronyism chief executive Pushpan Murugiah.

“They seemed to want to know if I was influenced by anyone in my work as a researcher and commentator, especially on Anwar and the MACC and this so-called conspiracy to overthrow the government,” IMAN Research director of research Aziff Azuddin told ST about his police questioning.

Who is Daim?

Mr Daim was highly influential, especially during the two periods spanning the 24 years that Tun Dr Mahathir was prime minister. During Dr Mahathir’s first stint as prime minister, Mr Daim served as finance minister and UMNO’s treasurer, giving him wide powers to shape corporate decisions.

He headed the Council of Eminent Persons after Dr Mahathir returned as prime minister in 2018. While the administration called it an advisory body, Mr Daim seemed to run what insiders called a “parallel administration” that had decision-making power and could access confidential government information.

Critics have panned graft probes into both Mr Anwar’s nemeses, Dr Mahathir and Mr Daim, as politically calculated to blunt potential threats to the Prime Minister.

How is the government’s response being received?

The opposition and civil society have slammed the government’s failure to take sterner action against the MACC, as well as the claim of a conspiracy to overthrow Mr Anwar, which they believe is an abuse of police power to stifle dissent.

There is a sense of hypocrisy given that when Mr Anwar was opposition leader, he also called for Mr Azam to be suspended after the 2022 shareholding revelations.

Amid scrutiny of the Daims’ engagement of a foreign public relations consultant, leaders of Mr Anwar’s party, Parti Keadilan Rakyat (PKR), admitted on March 3 that they had in 2016 engaged a US political consultancy firm to lobby for his release from a controversial sodomy conviction.

The police are also acting based on the police report by a possibly disgruntled Malaysian journalist whose service as a communications consultant was terminated by the Daims. On the other hand, the government refused to act on published articles by Bloomberg citing numerous sources and has instead cast aspersions on the reporting.

Even leaders in Mr Anwar’s Pakatan Harapan (PH) coalition have voiced their unhappiness with the government’s response.

Mr Rafizi and his allies in PKR attended a rally calling for the arrest of Mr Azam, while DAP secretary-general Anthony Loke, who is Transport Minister, said the government’s response has been inadequate.

Mr Loke’s colleague, DAP disciplinary board chief Tony Pua, has been far more explicit.

Mr Pua scoffed at the idea that a public relations plan could be “detrimental to parliamentary democracy”, since “swaying public opinion is intrinsically democratic”.

“Our Reformasi PM must stop this ridiculous nonsense,” he said in a Feb 27 Facebook post, using the Malay term that was Mr Anwar’s slogan throughout his 24 years in opposition.

Why this matters

Mr Anwar has already been criticised each of the three times he renewed Mr Azam’s year-long contract, instead of fulfilling a PH election vow to refer the appointment of Malaysia’s anti-graft chief to Parliament.

Mr Anwar’s stance on the ongoing controversy, claiming a “Zionist” plot, has shades of then Prime Minister Najib Razak’s response to the saga of Malaysia’s now-insolvent 1MDB state fund. Najib, who lost the 2018 election and is now jailed over 1MDB’s billion-dollar scandal, had also raised the spectre of foreign interference while sacking and jailing dissenters.

Both narratives invoke a nationalistic siege mentality, but in Mr Anwar’s case, it also relies on goodwill from the Malay Muslim majority stemming from his strident stance on the Gaza conflict since the war began on Oct 7, 2023.

“Malaysia is among the sternest (critics of Israel and the US). Based on the latest information, we are on the radar,” he told Parliament, adding that “renowned Zionists” are part of the plot, riding on narratives that Teneo executives are pro-Israel.

These pro-government narratives include a viral video of Mr Daim’s wife and Mr Rafizi discussing the Teneo plan, which the latter has laughed off as “obviously AI-generated”.

The troubles surrounding the MACC come amid talk of early federal polls to coincide with three state polls due by mid-2027. A general election is due only by early 2028, but Melaka, Johor and Sarawak are expected to go to the ballot as soon as mid-2026.

Along with the public scrutiny on the MACC, there has been a growing number of investigations, court cases and social media campaigns against political opponents that appear to be aimed at deflecting criticism against the Anwar administration.