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Readying for polls, Malaysian PM Muhyiddin keeps 1MDB in spotlight


Faced with growing doubts over his legitimacy, Prime Minister Muhyiddin Yassin has been lining up his ducks in recent weeks to defend his premiership in national polls expected as soon as the coronavirus pandemic is under control in Malaysia.

Official sources told The Straits Times that last week's crossover of two MPs from Datuk Seri Anwar Ibrahim's Parti Keadilan Rakyat (PKR) and an assemblyman from Parti Warisan Sabah was just the start of a wave of defections to further destabilise the opposition.

Meanwhile, the 1Malaysia Development Berhad (1MDB) saga that helped sink Najib Razak at the 2018 polls is being revived, with various efforts to claw back billions of dollars that went missing, as the former premier remains a key player of the Umno faction that is pushing to challenge Tan Sri Muhyiddin's Parti Pribumi Bersatu Malaysia at the next election.

Mr Muhyiddin co-founded Bersatu to topple Umno after he was sacked as deputy premier as well as the ruling party's number two after criticising Najib over his handling of the controversy that made global headlines in 2015.

"1MDB is one of the biggest financial scandals in the country. During this one-year period, the government has never compromised in upholding justice and ensuring that the individuals involved continue to be prosecuted in court," Finance Minister Tengku Zafrul Aziz said on Thursday (March 4), about "the ongoing efforts... against all parties involved, directly or indirectly, with 1MDB and related entities".

1MDB has reclaimed headlines this year not just with ongoing graft trials involving Najib. Tax collectors are seeking RM77 million (S$25.3 million) from associates of fugitive Low Taek Jho who is alleged to have stolen funds from the state-owned entity, while the RM324 million settlement with Deloitte announced on Wednesday, worth over 40 times the fees paid to the company, represents the largest 1MDB-related settlement by an audit firm in South East Asia.

A whopping RM2.83 billion disgorged by local institution AmBank last week - worth nearly a third of its market value - has won grudging praise even from fierce detractors.

"The Ministry of Finance has done well to complete the RM2.83 billion settlement with AmBank Bhd over their culpability in the 1MDB corruption scandal," said opposition MP Tony Pua, who was political secretary to the finance minister while the Pakatan Harapan (PH) coalition was in power until a year ago.

Sources with knowledge of the matter also confirmed that Malaysia has set up a team of top anti-graft officials and lawyers to work with the Finance Ministry in pursuing various avenues to reclaim money siphoned out of 1MDB, including ongoing negotiations with Abu Dhabi, whose International Petroleum Investment Company (IPIC) has been locked in a years-long US$6 billion (S$8 billion) dispute with Kuala Lumpur.

"When Foreign Minister Hishammuddin Hussein went to Abu Dhabi last month, he returned the next day, but negotiators stayed on," said an official, who could not be named due to the confidentiality of the matter.

The quarrel centres around some US$3.5 billion that 1MDB deposited with an IPIC subsidiary that the latter insists it never received. Malaysia has sued for the return of US$1.2 billion that was paid to IPIC in a complex settlement agreed under Najib in 2017. The case is being arbitrated in Britain.

Although the Malaysian King assented to a state of emergency in January that does away with the need to convene the legislature or hold elections until August, the Premier knows his vow to dissolve Parliament once Covid-19 is conquered could result in a ballot by the middle of the year, especially if the ongoing vaccine roll-out successfully reduces the caseload by the time Hari Raya arrives in May.

"For now, the timeline is still September, but PM is pushing us to get ready as soon as possible. Campaign materials are already being printed and Perikatan Nasional (PN) seat negotiations at state level are ready to be brought to the national leadership," a top Bersatu leader told ST.

PN election director Azmin Ali met representatives from each party in the Bersatu-led coalition last week, after Mr Muhyiddin told Umno last month to decide if the party would continue to be allied with him for the upcoming election.

Umno president Ahmad Zahid Hamidi responded on Feb 26 that their cooperation would end once Parliament is dissolved, and not extend to the polls. However, the matter could yet become the centre of heated debates at the Umno annual general assembly scheduled for March 27, and party leadership polls due in mid-2021.

"Azmin has been working to synergise Bersatu grassroots leaders with those from his non-governmental organisations who have yet to establish themselves in the party," a PN official said, referring to the former PKR deputy president's supporters who have ditched the opposition in the past year.

The PN official added: "There will be more defections from the opposition, especially non-Malays, to shore up multiracial support for what has been perceived as a Malay Muslim-dominated government".

Umno heads the Barisan Nasional (BN) which shockingly lost its six-decade grip on power at the 2018 election, after which only four of the original 13 component parties remained in the coalition.

Two of its MPs pulled support for Mr Muhyiddin in January, just weeks after only 111 out of 220 federal lawmakers - two parliamentary seats remain vacant - voted in favour of the government's budget. This came amid a split in the party over whether to continue cooperating with Bersatu.

A PN-BN pact is expected to trounce the Anwar-led PH at the election, but Umno will have to continue playing second fiddle to Bersatu. However, a three-way battle could result in Umno losing power again.

If the spectre of 1MDB is successfully revived ahead of the polls, Zahid's alliance with Najib could be a handicap for his party's prospects, should it decide to go its own way.