Malaysian ex-minister Daim Zainuddin accused of money laundering

Malaysia’s former finance minister, Daim Zainuddin, finds himself embroiled in a financial scandal as leaked documents reveal that his family members are beneficiaries of a multimillion-dollar trust with investments in UK and US real estate. The revelation comes amidst an ongoing investigation by the Malaysian Anti-Corruption Commission (MACC) into Daim’s offshore dealings, triggered by the Pandora Papers revelations. The documents suggest a complex web of financial transactions involving Daim’s family, prompting allegations of money laundering and abuse of power.

Leaked records from a Cayman Islands financial services firm shed light on the ZA Star Trust, created by Daim’s wife in 2010. As of 2020, the trust held assets worth US$52.5 million, with investments in three British Virgin Islands companies. Two of these companies own prime properties in London, including an eight-floor office building acquired in 2014 for US$50.8 million. Additionally, the trust indirectly owns shares in nine entities across Delaware and Massachusetts, involved in various commercial and residential real estate ventures.

The financial statements of ZA Star Trust also reveal a US$47 million loan from an entity called Adam Zeta Trust. However, the ownership of Adam Zeta Trust and the timing of the loan remain undisclosed in the leaked documents, adding another layer of opacity to the financial dealings of Daim’s family.

Genesis Trust & Corporate Services Ltd., the Cayman provider administering the trust, designated Daim and his family members as “high risk” in compliance documents due to their connection with the former finance minister. The trust company, acquired by Jersey-based firm Highvern in 2022, is among the 135 trust companies operating in the Cayman Islands, a jurisdiction previously under international scrutiny for deficiencies in its anti-money laundering system.

Daim Zainuddin, often referred to as “the godfather of corporate Malaysia,” has consistently denied any wrongdoing. When confronted in 2021 about the Pandora Papers revelations, he claimed to have paid taxes on his investments and properties, dismissing allegations of impropriety. The MACC, however, launched a probe into Daim’s offshore wealth last year, suspecting a potential link to the misappropriation of US$480 million in state funds dating back to the 1990s. The former finance minister challenges the legitimacy of the investigation, labeling it a “political witch hunt”.

In response to the investigation, the MACC seized the Ilham Tower, a 60-story skyscraper owned by the Daim family in Kuala Lumpur’s financial hub, after Daim failed to declare his assets as requested. The MACC clarified that it had not officially accused Daim of wrongdoing but emphasized the need for asset disclosure. Daim, in turn, has challenged the MACC’s actions in Malaysia’s high court, with a ruling expected on March 4.

The unfolding scandal surrounding Daim Zainuddin and his family’s financial dealings casts a shadow on the former finance minister’s reputation. As the investigation continues, the intricate web of offshore trusts, real estate investments, and opaque financial transactions raises concerns about potential money laundering and abuse of power. The legal battles and the upcoming court ruling on Daim’s challenge to the MACC’s actions add a layer of complexity to a case that has significant implications for Malaysia’s political and financial landscape.