Transparency International Malaysia warns settlements in corruption cases may weaken trust in accountability
Transparency International Malaysia has warned that the increasing use of compounds, settlements and charge withdrawals in corruption-related cases risks creating a perception that accountability can be negotiated, potentially weakening public trust in anti-corruption institutions and the rule of law.
- TI-M warned that financial settlements must not be perceived as substitutes for accountability.
- The group cited several corruption-linked cases resolved through compounds or charge withdrawals.
- It called for clearer guidelines, greater transparency and institutional reforms.
KUALA LUMPUR, MALAYSIA: Transparency International Malaysia (TI-M) has expressed concern over what it described as the increasing reliance on compounds, settlements and prosecutorial withdrawals in corruption-related cases, warning that the trend could weaken public confidence in anti-corruption institutions and the administration of justice.
In a statement issued on Friday, the anti-graft watchdog said several recent and past cases had fuelled public concern over how corruption-linked offences are being resolved, particularly where criminal proceedings ended following financial settlements or asset recovery arrangements.
TI-M stressed that while Malaysian law permits compounds and other discretionary mechanisms under certain circumstances, greater transparency and consistency are needed to ensure public trust is maintained.
“While asset recovery serves an important public interest objective, recovery alone should not be regarded as a substitute for accountability,” TI-M president Raymon Ram said.
“Corruption is not merely a financial loss to be recovered. It is an abuse of entrusted power that undermines public institutions, weakens governance, and erodes trust in the rule of law.”
Concerns over growing reliance on settlements
TI-M said it had repeatedly raised concerns over the use of compounds, settlements and discontinuance arrangements in corruption and corruption-linked cases.
The organisation argued that although each case involves distinct legal and evidential considerations, the cumulative effect of such outcomes could shape public perceptions about whether accountability is being applied equally.
According to TI-M, a growing number of Malaysians appear concerned that certain corruption-related matters are increasingly being resolved through negotiated financial outcomes rather than judicial determination through open court proceedings.
The watchdog warned that repeated use of settlements without sufficient public explanation risks normalising what many perceive as a “pay-to-settle” culture.
It said such perceptions could weaken deterrence, undermine confidence in anti-corruption institutions and foster the belief that accountability can be negotiated rather than established through due process and judicial scrutiny.
High-profile cases cited
TI-M pointed to several notable corruption and corruption-linked cases resolved through compounds, asset recovery arrangements or prosecutorial withdrawals.
Among them was the 2020 discontinuance of a 1Malaysia Development Berhad (1MDB)-linked money laundering prosecution following an asset recovery arrangement.
The organisation also cited the September 2021 discharge and acquittal of UMNO leader and former deputy finance minister Ahmad Maslan after he agreed to pay a RM1.1 million compound.
Court records show Ahmad was acquitted and discharged after the prosecution withdrew money laundering and false statement charges against him following payment of the compound. Malaysian Anti-Corruption Commission (MACC) officials at the time described the compound as both a punitive measure and a form of asset recovery under anti-money laundering legislation.
Another case highlighted by TI-M involved Adam Radlan Adam Muhammad, the Segambut Bersatu deputy division chief, who was acquitted and discharged on 20 August 2025 of 12 corruption and money laundering charges linked to the Jana Wibawa programme.
The Sessions Court was informed that the Attorney-General’s Chambers had accepted representations from Adam Radlan and that he had settled a RM4.1 million compound under provisions of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001. The prosecution subsequently withdrew the charges.
Broader debate over asset recovery
TI-M also referred to recent public endorsements of a recovery-first approach in financial crime and tax enforcement matters involving hundreds of millions of ringgit in penalties, compounds and recovered assets.
The organisation acknowledged the importance of asset recovery in restoring public funds and compensating losses suffered by the state.
Malaysia has recovered substantial sums through settlements and asset recovery efforts linked to the 1MDB scandal, including major agreements involving international financial institutions and foreign jurisdictions. Authorities have repeatedly described such recoveries as a key component of national anti-corruption efforts.
However, TI-M argued that successful recovery of funds should not automatically be viewed as a substitute for legal accountability.
The organisation said public confidence depends not only on the return of assets but also on visible adherence to due process and equal application of the law.
Calls for reform
TI-M acknowledged that the Attorney General, acting as Public Prosecutor, possesses broad prosecutorial discretion under Article 145(3) of the Federal Constitution.
It also recognised that existing legislation allows certain offences to be compounded under specified circumstances.
Nevertheless, the organisation maintained that the exercise of such powers should be accompanied by greater transparency, especially in corruption-related matters involving significant public interest.
Among its recommendations, TI-M called for the Attorney-General’s Chambers and MACC to provide fuller explanations whenever corruption-related prosecutions are discontinued following compounds, settlements or recovery arrangements.
The watchdog also urged authorities to publish clear guidelines governing the use of such mechanisms, strengthen reporting and oversight requirements, and accelerate long-discussed institutional reforms, including separating the roles of Attorney General and Public Prosecutor.
“This is not a call to abandon legitimate asset recovery efforts,” Raymon said.
“Rather, it is a call to ensure that recovery complements accountability and does not become perceived as a substitute for it.”
He added that Malaysia’s anti-corruption framework must not only be effective but must also be seen to operate fairly and consistently.
“At a time when the nation is striving to strengthen integrity and confidence in its institutions, accountability must remain clear, transparent, and consistently applied,” he said.
