21-12-2023 (KUALA LUMPUR) The Malaysian Anti-Corruption Commission (MACC) has seized the multi-million-dollar Ilham Tower, owned by the family of former finance minister Daim Zainuddin. This audacious move marks a significant escalation in the ongoing probe into controversial transactions involving entities once controlled by the United Malays National Organisation (UMNO).
The seizure, executed on December 21, 2023, followed Mr. Daim’s refusal to comply with MACC’s petitions to declare his and his family’s financial holdings. The anti-money laundering investigation, initiated in May 2023, centers on a corporate transaction valued at RM2.3 billion (approximately US$500 million) between publicly listed Renong Bhd and United Engineers Malaysia Bhd (UEM) in November 1997. These entities were once cornerstones of the business empire linked to the former ruling UMNO party.
MACC officials remained unavailable for immediate comment, while Mr. Daim, who served as UMNO treasurer from 1984 to 2001, declined to comment on the matter. Financial executives close to Mr. Daim revealed that he had received an order from the MACC in May to declare his financial holdings and assets belonging to his family members.
However, Mr. Daim rebuffed these demands, asserting during questioning that he had no involvement in the Renong-UEM deal. He maintained that the transaction, which involved UEM acquiring a 33% stake in Renong, was purely a corporate matter governed by respective managements, boards of directors, and shareholders.
Mr. Daim 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 offenses under investigation. Sources confirmed that in early December, Mr. Daim received a notification from the MACC that no further extensions would be granted, leading to the subsequent seizure of his flagship Ilham Tower.
Under the seizure order, the MACC will assume control of the property on paper. The building, estimated to have cost US$580 million, is situated amidst prime commercial and high-rise residential properties near the iconic Petronas Twin Towers in downtown Kuala Lumpur.
Financial executives familiar with the situation noted that the asset-declaration order in May was accompanied by the freezing of at least a dozen Daim-related business accounts. These accounts remain frozen, and all payments for his financial enterprises, including payroll, require MACC approval.
The MACC has been tight-lipped about the Renong-UEM deal. In a statement released at the investigation’s outset, the agency confirmed that it was gathering information regarding the “alleged embezzlement of state funds amounting to an estimated RM2.3 billion.” It also disclosed that bank accounts containing RM39 million belonging to an unidentified former senior minister and two businessmen had been frozen.
Government officials and anti-graft investigators directly involved in the probe confirmed that the alleged embezzlement of state funds directly referred to the RM2.3-billion-ringgit Renong-UEM deal. The three unnamed individuals are believed to be Mr. Daim, who served as finance minister from 1984 to 1991; Mr. Halim Saad, his long-time business protégé who controlled Renong and UEM through a complex web of cross-holdings; and Mr. Abdul Rashid Manaf, a prominent Kuala Lumpur-based lawyer who handled UMNO’s corporate affairs.
The MACC’s decision to revisit a transaction that occurred over 26 years ago has fueled speculation that the ongoing investigation has strong political undertones, deeply rooted in Malaysia’s troubled political history, particularly the unceremonious sacking and imprisonment of current premier Anwar Ibrahim in 1998 after a falling out with then-premier Dr. Mahathir Mohamad.
Mr. Ibrahim, who succeeded Mr. Daim as finance minister in 1991 and rose to become deputy premier, was highly critical of the Renong-UEM deal, which triggered a meltdown in the Malaysian stock market. Many analysts believe that this deal was a critical factor in the strained relationship between Dr. Mahathir and his deputy.
With a business career spanning back to the late 1960s, Mr. Daim, a lawyer by training, is widely regarded as one of Malaysia’s wealthiest individuals. He has consistently maintained a stealthy approach to his business empire, with the majority of his assets held through obscure family companies or nominee associates.
Mr. Daim’s financial clout is most visibly represented by the 60-storey Ilham Tower, completed in 2015 and housing both offices and a hotel. According to documents filed with the Companies Commission of Malaysia, the building is owned by a private entity called Ilham Tower Sdn Bhd, which is in turn majority-owned by another private company, Ilham Baru Sdn Bhd. This company is 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.
