30 June 2016
In a shocking announcement Malaysian anti-corruption commission yesterday said that it had arrested Lim Guan Eng graft charges. Lim is the chief minister of Penang state and also the secretary general of the Democratic Action Party. He is a prominent figure in the Malaysian opposition. His party is the most popular ethnic Chinese party in Malaysia. Lim is the son of veteran politician Lim Kit Siang. Lim Kit Siang, DAP parliamentary leader, announced in a tweet: “Guan Eng arrested by MACC on two charges of corruption and will be produced in court tomorrow morning.”
It is alleged that Mr. Lim bought a two-storey bungalow for Ringgit Malaysia 2.8 million whereas its current market value is RM3.8 million. He bought this property from Ms Phang Li Koon who is a director of Magnificent Emblem. This company owns an agricultural land applied for government approval for the conversion of this land for residential use. According to state exco member Chow Kon Yeow this application was rejected by the Penang Island City Council.

Attorney-General Tan Sri Mohamed Apandi Ali, PM Najib’s close ally,  confirmed yesterday that he will lead the prosecution team in Lim Guan Eng ’s case.

Mr Shabudin Yahaya, a Member of Parliament for the ruling UMNO party, raised this issue in the Malaysian Parliament in March. He asked if the purchase of the bungalow by Lim Guan Eng, was linked to the Penang state government’s decision to sell a plot of land to a private company called Kuala Lumpur International Dental Centre.
Ms Phang Li Koon was also arrested yesterday. Mr Lim has denied the charges. He even invited Malaysian media to tour the property in March as a show of transparency. He was jailed in 1998 for 12 months on sedition charges.
The arrest comes after rebound of political grip of Prime Minister Najib Razak. It was widely speculated that this move will enable him to further tighten his grip on Malaysian politics in the forthcoming election 2018.In the last 10 days Prime Minister Najib Razak struck hard at his detractors by sacking deputy president of the ruling party, Muhyddin Yassin and Mukhriz Mahathir from the party. These two politicians along with former prime minister Mahathir Mohamed (father of Mukhriz Mahathir) were seeking the ouster of PM Najib for his involvement in 1MDB corruption scandal.
In the wake of these political turmoil, last week the chief of the Malaysian ant-corruption commission chief announced that he would go on early retirement. He led the corruption probe on 1MDB. Earlier he appointed his close ally, Mr Mohamed Apandi Ali as Attorney General. In an unusual route,  Mohamed Apandi Ali, went from Federal Court judge to Attorney-General amid an ongoing investigation on 1MDB headed by his predecessor, Abdul Gani Patail. Since then the Attorney General has cleared PM Najib of any wrongdoing. Apandi had been an active Umno member and had previously held the Kelantan Umno treasurer post before taking office.

UPDATE
1 July 2016
When Lim Guan Eng  was produced at the High Court, Judicial Commissioner Datuk Azmin Ariffin read the charges again to Lim and Phang, with both pleading not guilty.

Judge Azmin set bail at RM1 million in one surety for Lim and ordered that he notify the court and Attorney-General’s Chambers two days before he leaves the country. His passport was not seized. Bail for Ms. Phang was set at RM200,000 in one surety with no additional conditions.Judge Azmin fixed Sept 22 for case management for both Phang and Lim.
Lim Guan Eng’s trouble started when he said that the Penang state government will freeze 1MDB’s purchase of 234 acres of land in Air Itam until there is “accountability and transparency” with regard to the allegation-riddled firm. The state legislative assembly then passed a motion to blocking any further state transaction with 1MDB. Lim also said that the state records show only 116.89 acres of land purchased by 1MDB and that the remaining 117.11 acres was not accounted for. He said that according to the records 1MDB owns only 20% or 23.47 acres in the state.
 
Lim alleged that 1MDB paid RM1.08 billion for 234 acres of land. He contended that 1MDB holds only 20% or 23.47 acres (9.5ha) of the 116.89 acres of freehold land.
 
He further said that the lot 1584 was also owned (in varying acreages) by individuals Chong Sie Cheong, Ng Peng Wah and Tan Jiak Chye, and companies Choong Lye Hock Estates Sdn Bhd and Gerak Indera Sdn Bhd.The same individuals and companies as well as Farlim Properties Sdn Bhd also share ownership with 1MDB RE on Lot 1457, the records showed.
 
In December last year, 1MDB chairman Tan Sri Lodin Wok Kamaruddin said the amount paid was not only “commensurate” with its value but highly attractive.
Days before the 13th general election, Prime Minister Datuk Seri Najib Razak announced that the federal government would build 9,999 units of low-cost and low-medium housing in Air Itam. It is expected that the 3,000 families that would be evicted from the land will be compensatred with newly built homes.
 
Lim also cited the case of the Singapore’s directive to BSI Bank to shut down, where its merchant status was withdrawn, pending investigations by the authorities.
 
The Monetary Authority of Singapore fined BSI US$13.3 million on 41 grounds of “serious breaches of anti-money laundering requirements, poor management oversight of the bank’s operations and gross misconduct by some of the bank’s staff”.
 
Swiss authorities (FINMA) investigating BSI bank in Switzerland also have ordered the closure of the bank. It is speculated that the irregularities found in the banks in Singapore and Switzerland relate to 1MDB transactions.