Liong Sik's acquittal, a corrupt signal from Najib to Umno that IT'S BUSINESS AS USUAL?

UPDATE3 KUALA LUMPUR - Former MCA president Ling Liong Sik was a happy man today. The former Transport Minister, one of the longest-serving during the Mahathir administration, was acquitted of having cheated the federal government over the RM4.6 billion Port Klang Free Zone project.

However, the decision by the Kuala Lumpur High Court is unlikely to go down well - not only among critics but with investors and members of the legal fraternity.

"Liong Sik must have very good lawyers or the Attorney-General has very good ones. Or is this another political decision?" MP for Kelana Jaya Wong Chen told Malaysia Chronicle.

"This looked like a straight-forward slam-dunk case. You have a written letter from Liong Sik, which he had no authority to issue. So how did the A-G lose the case? I hope the government will appeal immediately."

Reasonable doubt

In acquitting Liong Sik, Judge Ahmadi Asnawi said the defence had created a reasonable doubt in the prosecution's case.

Nine witnesses, including former prime minister Mahathir Mohamad, gave evidence for Liong Sik, who was also a former president of the MCA.

"This is a major let-down. Liong Sik and PKFZ are part of the Mahathir era. There is no doubt that a lot of BN bigwigs are involved not just Liong Sik. Even so, Najib should not play politics in the courts and in the business arena," MP for Bayan Baru Sim Tze Tzin told Malaysia Chronicle.

"As PM, he should maintain a tough anti-corruption stance but with a decision like this which practically allows RM4.6 billion of the people's money to vanish into thin air without holding anyone responsible, it will send a very awful message to investors and to our own citizens.

"We hope the government will continue to prosecute and punish all the perpetrators including Liong Sik. We find it so strange that Najib can win comfortably in the recent Umno election with this type of performance. Don't Umno members care about corruption?"

Umno-BN, large-scale graft back in business

Tze Tzin's comments reflect the suspicion of many Malaysians, who point to the country's dismal track record on corruption. Ruled by the Umno-BN coalition since 1957, Malaysia ranks high on the global lists of most corrupt nations, with New York-based Global Financial Integrity estimating that more than RM1 trillion of illicit funds had been secretly siphoned out of the country, by-passing the official banking and tax system.

Mahathir, 88, ruled Malaysia with an iron hand from 1981 to 2003. Practically every major infrastructure deal went under his personal scrutiny. Liong Sik and S Samy Vellu were the Chinese and Indian representatives in Mahathir's BN coalition but neither men had much real power, and the final approval for any large scheme such as the PKFZ would usually have to come from Mahathir and his Umno party.

Many believe that Mahathir may have pulled strings in Liong Sik's acquittal, otherwise the latter might have blown the whistle on his former boss.

In an immediate response to the acquittal news, Opposition Leader Anwar Ibrahim had tweeted "I anticipated during GE campaign."

Today's court decision will be another setback for the Najib administration, which never seems to be able to gain much ground in its much-publicized fight against corruption.

"Let's not be naive. It is very clear that despite receiving a strong mandate from Umno members to continue as their president, Najib is not implementing reforms for his party. Instead he has signaled what the warlords (faction leaders) want to hear the most - that it is business as usual. Yes, corruption and large-scale graft is back," MP for Batu Tian Chua toldMalaysia Chronicle.

Biggest financial debacle

The 70-year-old Liong Sik was alleged to have deceived the Cabinet by hiding the fact that there was an additional interest rate of 7.5% to be levied on the purchase price of RM25 per square foot in the deal, despite knowing that the interest rate was already included in the price.

He was also accused of inducing the Cabinet to approve the land purchase, which caused losses to the government.

There were also alternative charges slapped on Liong Sik, of having deceived the Cabinet that the purchase of PKFZ's 999.5 acres of land had been agreed to by the Valuation and Property Services Department despite knowing there had been no such approval.

The PKFZ project, planned to be Malaysia's largest integrated port and logistics hub, was initially estimated to cost RM1.1 billion. It was mooted by Liong Sik in 1997. However due to dubious and enormous cost overruns, the project costs quadrupled to RM4.6 billion by 2007.

According to independent auditor Pricewatercooperhouse, if the government bonds and debt issued to fund PKFZ were not restructured, the entire project could end up costing the people RM12.5 billion.

Malaysia Chronicle