According to a 2013 public survey by Transparency International, a majority of the surveyed households perceived corruption in Malaysia to be a significant problem. A quarter of the surveyed households consider the government's efforts in the fight against corruption to be ineffective. Corruption in Malaysia generally involves political connections still playing an important role in the outcome of public tenders.
Government contracts are sometimes awarded to well-connected companies, and the policies of awarding huge infrastructure projects to selected Bumiputera companies without open tender continue to exist.
In February 2016, Malaysia made an appearance in Time Magazine with the dubious distinction of being among a list of five countries whose corruption scandals are being highlighted. The magazine zoomed in on the 1Malaysia Development Berhad scandal (1MDB) and Prime Minister Najib Razak's corruption.
On 28 July 2020, Najib was convicted on seven counts of abuse of power, money laundering and criminal breach of trust by a Malaysian High Court in relation to the 1MDB scandal. He was sentenced to 12 years' imprisonment and fined RM210 million.
Corruption Perceptions Index Transparency International's 2025 Corruption Perceptions Index, which scored 182 countries on a scale from 0 ("highly corrupt") to 100 ("very clean"), gave Malaysia a score of 52. When ranked by score, Malaysia ranked 54th among the 182 countries in the Index, where the country ranked first is perceived to have the most honest public sector. For comparison with regional scores, the best score among those countries of the Asia Pacific region that appeared in the Index was 84, the average score was 45 and the worst score was 15. For comparison with worldwide scores, the best score was 89 (ranked 1), the average score was 42, and the worst score was 9 (ranked 181, in a two-way tie).
Malaysia's best showing in the Corruption Perceptions Index since the start of the current scoring system in 2012 was a score of 53 in 2019. Thereafter, Malaysia's score fell each year to a low of 47 in 2022, but Transparency International praised Malaysia and its newly improved 2023 score of 50 in the context of the Association of Southeast Asian Nations (ASEAN), writing, "Across the ASEAN countries, Malaysia (50) remains above the regional average with robust elections alongside an anti-corruption commission that has delivered on high-profile cases over the last decade." Malaysia retained its improved score of 50 in the 2024 Corruption Perceptions Index and rose to a score of 52 in 2025.
Transparency International lists Malaysia's key corruption challenges as: Political and Campaign Financing: Donations (e.g., USD700Million) from both corporations and individuals to political parties and candidates are not limited in Malaysia. Political parties are also not legally required to report on what funds are spent during election campaigns. Due in part to this political landscape, Malaysia's ruling party for over 55 years has funds that are highly disproportionate to those of other parties. This unfairly impacts campaigns in federal and state elections and can disrupt the overall functioning of a democratic political system. “Revolving door”: Individuals regularly switch back and forth between working for both the private and public sectors in Malaysia. Such circumstances – known as the ‘revolving door’ – allow for active government participation in the economy and public-private relations to become elusive. The risk of corruption is high and regulating public-private interactions becomes difficult, also allowing for corruption to take place with impunity. Another factor which highlights the extent of ambiguity between the public sector and private corporate ownership is that Malaysia is also a rare example of a country where political parties are not restricted from possessing corporate enterprises. Access to information: As of April 2013, no federal Freedom of Information Act exists in Malaysia. Although Selangor and Penang are the only Malaysian states out of thirteen to pass freedom of information legislation, the legislation still suffers from limitations. Should a federal freedom of information act be drafted, it would conflict with the Official Secrets Act, in which any document can be officially classified as secret, making it exempt from public access and free from judicial review. Additional laws such as the Printing Presses and Publications Act, the Sedition Act 1948, and the Internal Security Act 1960 also ban the dissemination of official information and offenders can face fines or imprisonment. Malaysia suffers from corporate fraud in the form of intellectual property theft. Counterfeit production of several goods, including IT products, automobile parts, etc., is prevalent.
In 2013, Malaysia was identified in a survey by Ernst and Young as one of the most corrupt countries in the region according to the perceptions of foreign business leaders, along with neighbouring countries and China. The survey asked whether it was likely that each country would take shortcuts to achieve economic targets.
Types of corruption
Corruption in Immigration Enforcement Despite periodic actions by the government to crack down on petty corruption in the Immigration Department, bribe-taking and fraudulent issuance of visas have been long-standing problems, particularly among immigration officers at the KLIA and KLIA2 terminals of Kuala Lumpur International Airport. In 2016, the Malaysian Anti-Corruption Commission (MACC) uncovered a scheme in Selangor, in which immigration officers collected passport application fees from travellers and then submitted fraudulent paperwork declaring them disabled, resulting in fee waivers that amounted to over 1 million Malaysian ringgit by the time the scheme was exposed. In a December 2016 statement to the Malaysian press, Deputy Prime Minister Ahmad Zahid Hamidi estimated that over half of the 1500 immigration officers working in the KLIA and KLIA2 terminals had participated in a range of corrupt practices, including fraudulent issuance of visas, tampering with Immigration Department data, and collusion with human-trafficking agents.
Anti-corruption bodies
The Malaysian Anti-Corruption Commission (MACC) is a government agency in Malaysia that investigates and prosecutes corruption in the public and private sectors. The MACC was modelled after top anti-corruption agencies, such as Hong Kong's Independent Commission Against Corruption and the New South Wales Independent Commission Against Corruption, Australia.
The MACC is currently headed by Chief Commissioner Azam Baki. He was appointed to replace former Chief Commissioner Latheefa Koya, appointed by the Pakatan Harapan (PH) government after the new Perikatan Nasional (PN) government took over in March 2020. Previously, it was headed by Chief Commissioner Datuk Dzulkifli Ahmad. He was appointed on 1 August 2016 to replace former Chief Commissioner Tan Sri Abu Kassim Mohamed. Similarly, the agency is currently under the Prime Minister's Department.
During its term, Pakatan Harapan had appointed a controversial figure, Lateefa Koya, a former member of the ruling coalition party, People's Justice Party, to head the anti-corruption agency. She was appointed shortly after her resignation from the party.
On 3 July 2018, former Prime Minister Najib Razak was arrested by the Malaysian Anti-Corruption Commission (MACC), investigating how allegedly RM42 million (US$10.6 million) went from SRC International, a 1MDB subsidiary, into Najib's bank account. Police seized 1,400 necklaces, 567 handbags, 423 watches, 2,200 rings, 1,600 brooches and 14 tiaras worth $273 million.1MDB scandal explained: a tale of Malaysia's missing billions Published by The Guardian on October 25, 2018 On 28 July 2020, the High Court convicted Najib on all seven counts of abuse of power, money laundering and criminal breach of trust, becoming the first Prime Minister of Malaysia to be convicted of corruption, and was sentenced to 12 years' imprisonment and fined RM210 million.
Specific Cases Pan-Electric Industries Scandal
Pan-Electric Industries was a Singapore-based company that specialised in marine salvage work, and had 71 subsidiary companies, including hotel and property interests, with a market capitalization of S$230 million.Pan-Electric Liquidation, The New York Times, February 7, 1986. The company collapsed in 1985 due to unsettled forward contracts, forcing the stock exchanges of both Singapore and Malaysia to shut down for three days. At its demise, the company had a total debt of S$480 million, and all its shares held by 5,500 shareholders were found to be worthless overnight. As of 2000, it remains the largest corporate collapse in Singapore's history, and the only instance where the Stock Exchange of Singapore (SES) had to close. The Malaysian Kuala Lumpur Stock Exchange was also forced to close for three days as a result.
Deposit-taking co-operative scandal
In the aftermath of the collapse, key people in the company, such as Peter Tham, Tan Kok Liang, and Tan Koon Swan, were prosecuted and given varying jail sentences. The collapse of the company shook public confidence in the SES, causing prices of stocks to plunge. New securities laws were introduced in March 1986 to ensure that stockbroking firms can protect themselves against credit risks.
The 1986 deposit-taking cooperatives (DTCs) were a scandal waiting to happen.
A year before the scandal erupted, Consumers Association of Penang (CAP) had already written to JPK to find out the control exercised over cooperatives and the protection given to depositors should a cooperative face financial trouble or a “run”. CAP's investigations disclosed that malpractices in the cooperatives included directors using the cooperatives’ funds to buy land which they owned or controlled at above market price. Directors were also making the cooperatives buy the shares they owned in private companies at above market value. The cooperatives also gave big unsecured loans to directors, their relatives or their companies.
On 29 July 1986, CAP sent a memorandum on “The Need for Greater Control over Co-operatives” to Bank Negara Malaysia (BNM), the Ministry of Finance, Jabatan Pembangunan Koperasi (JPK), and the Ministry of National and Rural Development. The memorandum pointed out that unless the Co-operative Societies Act 1948 was amended and cooperative activities strictly regulated, depositors might lose billions.
However, this early warning fell on deaf ears and the scandal exploded.
The DTCs fiasco, which occurred the following month, involved 24 cooperatives, 522,000 depositors and about RM1.5 billion in deposits.
It was triggered off by Koperasi Belia Bersatu Berhad (KOSATU) suspending payments to depositors who wanted to withdraw their savings in July 1986. The Essential (Protection of Depositors) Regulation 1986, promulgated on 20 July 1986, allowed BNM to freeze the assets of KOSATU and its key management and also to investigate into the affairs of the cooperatives. Other depositors became jittery and this led to a run on other DTCs. On 8 August 1986, the activities of 23 other cooperatives were also suspended. Seventeen accounting firms were then appointed to assist BNM in its investigations and to come up with a White Paper.
The White Paper on the DTCs indicated that the 24 DTCs had by November 1986, together lost approximately RM673 million through mismanagement or fraud. The White Paper revealed that a significant number of cooperatives suffered from bad management, either due to a lack of expertise or professionalism or through imprudent, and in some cases, corrupt management.