Rumblings of Corruption in Penang

Long-serving Democratic Action Party faces allegations of tarnish

By: Murray Hunter

Behind the well-maintained infrastructure and services of the ethnic Chinese-dominated Malaysian island of Penang, which are unmatched by any other state, there are rumblings of corrupt practices within the state government.

The first doubts arose in 2015, when the former state chief minister and current national chairman of the Democratic Action Party, Lim Guan Eng, was accused of having purchased a bungalow from a Penang businesswoman for RM2.8 million (US$515,000 at current exchange rates), described as well under the then-current market value. Lim had rezoned agricultural land to residential for Magnificent Emblem, a company of which Phang was a director. Amid complaints that the then-ruling Barisan Nasional had trumped up charges against Lim in an effort to take the pressure off its own charges of massive corruption in connection with the 1Malaysia Development Bhd. scandal, he was charged by the MACC for abuse of power, while Phang was charged with abetting Lim.

However, when Pakatan Harapan won the 2018 general election, both Lim and Phang were acquitted of charges on the request by the prosecution. Nonetheless, the charge shook the foundations of the DAP, the ethnic Chinese leg of the reform opposition coalition Pakatan Harapan and, at election time, traditionally by far the best-organized coalition component at getting out the vote. Lim’s father, Lim Kit Siang, has been the face of the party for decades and a longtime public crusader against government sleaze. Guan Eng himself is a crucial member of the party and former secretary general.

Soon after the Pakatan Harapan government fell in 2020 and the Barisan, or components of it rose to power, Lim was arrested again over corruption allegations concerning the RM1.5 billion undersea tunnel planned to connect the island with the mainland across 3 km of open water. A Malaysian Anti-Corruption Commission probe alleged that Zarul Mohd Zulkifli, chairman of the construction consortium Zenith Sdn Bhd. had paid Lim 10 percent of the cost of the project, reported to be in the vicinity of RM3 billion. The MACC investigation also found that other Penang state executive council members had received bribes.

During the continuing trial in the Sessions Court, testimony recorded by the MACC of the late Ewe Swee Khang, the founder and executive chairman of Ewein Bhd., who mysteriously died last year after falling from the 17th floor of his Penang condominium, provided more revelations. Ewe claimed in a handwritten disposition that he sought reclaimed land for development. In exchange for Lim’s assistance and goodwill, he wrote that he would provide either condominium units or a share of the profit to Guan Eng. Ewe also claimed that Lim assisted him in gaining approval from the Penang City Council to develop a housing project in the City of Dreams.

This has been a personal tragedy for Lim, who went to jail for 18 months over sedition charges in which he and the DAP defended a 15-year-old ethnic Malay schoolgirl who had been placed under ‘protective custody’. after complaining that she had been raped by the former Melaka Chief Minister Rahim Thamby Chik, who was never charged. Lim was named a prisoner of conscience by Amnesty International.

Today, Lim is heavily criticized by some Penangites for his perceived arrogance and allegations of corruption that have been long hanging around him. Lim’s tarnished reputation upon the DAP’s clean image has been partly repaired by the unassuming leadership of Chow Kon Yeow. However, there are some in Penang who believe the DAP should be kept in check. Many questions are being asked over the escalating costs of Penang infrastructure projects, currently in construction. The 19.5 km Pan Island Link (PIL-1) is projected to cost RM 7.5 billion, equivalent to RM385 million per kilometer, the most expensive highway ever built in Malaysia. The construction costs for the Paya Terubong Twin Road project are reported to well exceed the RM545 million estimate. The Gurney Drive development project cost has risen from RM175 million to RM200 million.

Informed sources in Penang alleged to Asia Sentinel that state assembly opposition members have been given pieces of land to develop within their constituencies as an implicit method to silence dissent.

The DAP has held power in Penang since 2008 and controls billions of ringgit in funds. When governments hold power for long periods of time with large parliamentary majorities, they very often become complacent. This is where corruption creeps in.

According to the MACC Director General Azam Baki, who was interviewed recently in local media, 919 complaints have been filed against Penang civil servants for allegedly accepting bribes, abusing power, or making false claims within the state since 2019. According to Azam, some civil servants have awarded contracts to family members. Top DAP stalwarts have publicly demanded that Azam show proof of his corruption claims, rather than take the criticism seriously. Unfortunately, there are no statistics or court case records to verify the above claims and rebuttals in the public domain. Lack of transparency at state levels is a great hindrance in determining the real magnitude of corruption within the civil service.

Due to the DAP’s recent lackluster performance under the Pakatan Harapan federal government, and the hints of corruption, there is risk the party may lose considerable support in the coming general election, although this is unlikely to lead to any loss of parliamentary seats. The DAP secured 2.1 million votes in GE14. Their aggregate vote in the coming general election will be a major test. Today it is the second-largest party within the Dewan Rakyat, or lower house of parliament, and it is a partner in a number of state governments. However, the rumblings of corruption could damage its reputation in the minds of voters, particularly among the young. Many young DAP members are already complaining that candidates are being selected on presentation, rather than competence to do the job. The party’s commitment to meritocracy is in question, with its hybrid favoritism a major disconnect with the party faithful.

There is growing concern that the DAP must be very careful that its attacks on corruption on the part of UMNO’s Kleptocratic leaders doesn’t backfire. At risk is the firebrand non-racial, democratic socialist party’s reputation for belief in social and economic justice.

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For transparency and fairness, we are posting the comment of Joshua Woo Sze Zeng, former councilor in Penang, Malaysia. Regardless, Asia Sentinel stands by its story.

Murray Hunter’s article “Rumblings of Corruption in Penang” published on Asia Sentinel website (October 4, 2022) contains many misleading statements and errors.

The issues raised in the article about Penang such as the former chief minister, Lim Guan Eng’s house purchase, undersea tunnel project, Pan-Island Link 1 (PIL1) project, and alleged corruption in the state government show conspicuous selective reporting.   

Take for instance, the article’s underlining the accusation that Guan Eng has purchased his house below market value in exchange for rezoning a piece of agricultural land belonging to Magnificent Emblem. As made public previously, the piece of land was not rezoned and the house’s price was decided “without any coercion or special favours granted.”

Even before Pakatan Harapan took federal power in May 2018, the blogger who spread that accusation about Guan Eng’s house purchase had testified in court that he was actually ignorant of the date and value of the purchase – the allegation was fabricated. Subsequently, Guan Eng was acquitted.

Although the accusation has been disproven four years ago, Murray cited it approvingly in his article now – when the 15th general elections is near.

On the undersea tunnel project, Murray relied on the project’s contractor, who has admitted to have lied to the public and provided alleged self-contradicting testimony to MACC and court, as his source to characterise Guan Eng.

Curiously, Murray wrote that “MACC investigation also found that other Penang state executive council members had received bribes” even though there has not been a successful case proven in court. Moreover, there is no money trail found in their possession, despite the various allegations about payment made to Penang state leaders – unlike the case of the former Prime Minister Najib Razak with money trail traced in bank records. 

Murray has also randomly implicated the late Ewe Swee Kheng’s death to Guan Eng even though police investigation conducted under the current BN/PN government has found no foul play.

Murray wrote that all these events were “personal tragedy” to Guan Eng given his earlier political struggle. Many would disagree with Murray. Guan Eng’s real tragedy is the fact that despite clarifications given in public and in courts, and by the police, there are still writers like Murray who continue to circulate false accusations wrapped with misleading information and factual errors about Guan Eng – at a time when election is imminent.

Besides misrepresenting the various allegations about Guan Eng, Murray insinuated that Penang state government’s projects, namely the PIL1, Bukit Kukus elevated bypass, and the Gurney Wharf suffering from “escalating costs”.

The fact is that these projects used competitive open tender, with cost calculated based on unique engineering work. For example, the PIL1 requires tunnelling work done for 40% of its total length, not found in other highways in Malaysia.

Many believe in the integrity and innocence of the DAP National Chairman, Guan Eng. Those allegations are politically motivated based on a huge conspiracy relying on trump-up charges to not only tarnish Guan Eng’s clean reputation but also the image of the DAP-led Penang state government. As Guan Eng once said, “We are clean and are not afraid to prove we are clean.”

Murray has selectively chosen hearsay ‘evidence’ by a prosecution witness in court to paint an unfavourable picture of Guan Eng without mentioning that the printed evidence provided by the prosecution was not complete but a truncated version. DAP is confident that ultimately Guan Eng will be able to prove his innocence as no monies were found on him or in his family or close aides’ personal bank accounts.

The editors: Asia Sentinel is satisfied with the facts of the story and stands by it as written.