Why Malaysia’s military corruption scandals keep happening

Kua Kia Soong

Recent revelations of corruption within the Malaysian Army – involving collusion between contractors and senior officers to siphon off multi-million-ringgit procurement contracts – have once again outraged the public.

According to reports, procurements between 2023 and 2025 alone involved some 158 major projects and over 4,500 smaller ones, with “large cash inflows” traced to the bank accounts of senior military officers and their family members.

The army chief has stepped down. Seventeen company directors have been remanded. Even the Agong felt compelled to intervene, remarking pointedly: “The defence ministry is full of agents or former generals who have become salesmen. We even have textile firms wanting to sell drones!”

His comment cuts to the heart of the matter. All proclamations by the ‘Madani’ (trustworthy) government about reform and integrity will come to nothing unless the structures that enable corruption are dismantled.

Corruption is not merely a matter of individual greed. It is the predictable outcome of institutional design.

One obvious reform – though far from sufficient on its own – is to close the revolving door between public office and private defence contractors. Clear codes of conduct and enforceable regulations must prohibit civil servants and military officers from entering firms with which they had official dealings.

Without such structural safeguards, corruption will simply reproduce itself.

Small procurements, big procurements

If we total the sums involved in the current army scandal, the figure may exceed RM500m. That is no small amount.

But it pales in comparison with Malaysia’s mega-procurements: the RM5bn arms deal signed by then Prime Minister Dr Mahathir Mohamad with then Prime Minister Margaret Thatcher in 1991, the RM4.8bn (about RM7bn at current values) Scorpene submarine deal,and the RM11bn littoral combat ships (LCS) scandal.

In such mega-contracts, do ‘cartels’ operate in the same way? Of course not. At that level, corruption does not operate at arm’s length. It operates under political patronage, sheltered by defence ministers or prime ministers themselves.

The 1991 “arms for aid” deal involving British Hawk fighter jets was personally handled by Mahathir, who was then prime minister. The scandal dominated British media coverage for days, even as it was largely ignored by the Malaysian press.

Likewise, the Scorpene deal was overseen by then defence minister Najib Razak, and the LCS project fell under the authority of then Prime Minister Najib Razak and then Defence Minister Zahid Hamidi.

At this level, it is not small operators jostling for contracts. It is global defence companies, often backed by their governments, courting political decision-makers in the Global South.

Corruption as protocol, not exception

In some exporting countries, corruption has long been treated as an unofficial but accepted part of arms sales diplomacy.

France is a case in point. The Malaysian Scorpène scandal was not an aberration, even though it involved the grisly murder of Mongolian woman Altantuya Shaariibuu. It followed a familiar pattern.

The notorious Karachi affair illustrates this. In 2002, a bus bombing in Pakistan killed 11 French naval engineers working on submarine projects. Initially blamed on Islamist militants, subsequent investigations pointed instead to retaliation for France’s suspension of illicit commission payments following a 1994 submarine contract. The affair eventually led to corruption trials in France involving senior officials, including former Prime Minister Édouard Balladur.

This context matters. It shows that Malaysia’s defence scandals are not isolated incidents but part of a wider, entrenched system in which arms procurement is structurally vulnerable to corruption.

The structures that enabled past scandals remain firmly in place. Above all, meaningful accountability is still absent.

What are now described as ‘cartels’ are simply another manifestation of cronyism. Corruption flourishes when procurement decisions lack transparency, contracts are awarded through closed-door negotiations and secrecy is justified under vague claims of ‘national security’.

What must change

To curb corruption in defence procurement, Malaysia urgently needs parliamentary debate and oversight over defence policy and spending priorities, full budgetary transparency, independent external audits, scrutiny of secret budgets, oversight of intelligence services and robust procurement oversight mechanisms.

Parliament must establish special select committees to scrutinise large-scale procurements.

Open and competitive tendering should be mandatory, with no discretionary exemptions.

Ministerial override clauses – common in Malaysian legislation, including the Government Procurement Bill 2025 – must be abolished.

Independent technical and financial evaluation panels are essential.

Undisclosed agents, brokers and cartels must be strictly prohibited.

Whistle-blowers must be protected and rewarded.

And, all too rarely in this country, criminal liability must attach not only to individuals but to institutional failure and breaches of protocol.

What are our defence priorities?

Before debating procurement procedures, we must ask more fundamental questions.

Who are our enemies? Is it Singapore, Indonesia, Thailand, China – or perhaps the newest maritime pirate, the United States? Is the China threat real or inflated?

Are our most pressing threats not terrorism, piracy and non-traditional security challenges?

What kind of navy do we actually need? Do we require more submarines and major warships? Or would smaller patrol vessels better serve our maritime security needs? The budgetary implications are vastly different.

Can we afford advanced combat aircraft? Malaysia’s F-18s and Hawk 208s were last deployed against what a former defence minister described as a “rag-tag army” during the Lahad Datu incident in 2013. Would armoured vehicles and mortars not have sufficed?

An F-35 costs roughly RM500m per aircraft. Two recently slid off a US aircraft carrier into the ocean. Can Malaysia realistically afford such extravagance?

We nearly purchased French Rafale fighter jets, which cost almost as much. One can only imagine the defence minister’s reaction to the recent downing of Indian Rafales by Pakistan’s Chinese-made J-10s.

National rethink on defence spending

With Malaysia’s national debt at around RM1.3tn, it is long overdue for a serious national debate on defence priorities. Isn’t it time to cut defence spending and, like the EU, work to implement arms control and to pool resources in Asean in line with the principle of Zopfan – a zone of peace, fraternity and neutrality?

Only through transparent decision-making, strict adherence to international procurement standards and genuine democratic oversight can we ensure that corruption in military procurement – whether involving small fish or big fish – becomes a thing of the past.

Kua Kia Soong, a former MP, is the director of human rights group Suaram.

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