Malaysia charged a former minister on Thursday in connection with a multi-billion-dollar government overspend on a free trade zone, in one of the country’s biggest financial scandals.
The Port Klang Free Trade Zone, a 1,000-acre (405 hectares) commercial and industrial project south of the capital, was initially projected to cost 1.82 billion ringgit (539 million dollars).
However costs are now expected to balloon to 12.5 billion ringgit, making the affair one of the biggest financial scandals to hit the nation and a major embarrassment for the government which invested heavily in the scheme.
Prosecutor Manoj Kurup said that Ling Liong Sik, a former transport minister, had been charged with misleading the government into buying a piece of land within the zone which will cost an extra 720 million ringgit.
“The charge is for cheating in relation to the purchase price of the land,” Kurup told AFP.
“(The offence) has cost an additional 720 million ringgit for the land price,” the prosecutor said, adding that Ling faces up to seven years in jail if convicted.
Ling, 67, the most high-profile personality to be connected to the scandal, pleaded not guilty to the charge and was granted a 1 million ringgit (313,000 dollars) bail. The court fixed September 3 to decide on the hearing date.
Three others, including a former port chief, were charged in December last year. Their trial is still ongoing.
Ling was in the cabinet for 17 years and is also the former president of the Malaysian Chinese Association, the second-largest component party in the ruling Barisan Nasional coalition.
A report by the Port Klang Free Trade Zone’s external auditors has indicated the venture would be loss-making until 2029 because of the cost of paying its debts and would only break even in 2051.
Prime Minister Najib Razak, who set up a taskforce to look into the affair, has pledged his government would not hinder the investigations.
Najib came to power last year with a pledge to tackle corruption which is endemic in Malaysian politics and society, and a key factor behind the government’s disastrous performance in 2008 elections.
