Individual Corruption

Conflicts between Malaysian indigenous populations and logging companies over land rights are not uncommon, particularly when these land rights are not clearly documented. According to the US Department of State 2010, the chief minister of Sarawak was allegedly leasing indigenous populations’ customary land to logging companies and other land developers, in return for money and political favours.

According to Transparency International's Global Corruption Barometer 2010, just above one-tenth of the surveyed households reported to have paid a bribe to the land services in 2009 in order to obtain services such as buying, selling, inheriting and renting lands.

Business Corruption

According to Freedom House 2011, the Constitution of Malaysia provides for equal treatment of all citizens, but the country maintains an official affirmative action policy that gives preferential treatment to ethnic Malays (bumiputera) in many areas, including property ownership. Furthermore, companies should be aware that irregularities are seen in land transfers and, according to a 2007 report by Paul van der Molen, fraud and corruption occur in sales of land and dealing in shares of plantations.

Political Corruption

Transparency International Global Corruption Report 2008 reports that irregularities sometimes occur prior to elections in order to influence public favour towards Barisan Nasional candidates, including outright bribery, land-for-votes and low cost housing offers. According to a 2007 news article by BBC News, the head of Malaysia's Anti-Corruption Agency, Zulkipli Mat Noo was forced to resign due to allegations of graft. The allegations are related to acquisition of property through corrupt practices.

Another major scandal, which is considered one of the biggest corruption scandals in 2009 in Malaysia by the Transparency International Global Corruption Report 2009, was the Port Klang Free Zone (PKFZ) scandal. It involved a major construction project having its cost inflated from MYR 1.1 billion to MYR 4.7 billion. Further investigation revealed that the scandal involved politicians, government officials and business people. However, according to several newspapers published in 2010, such as Reuters and Bangkok Post, the costs are now estimated to have been inflated to MYR 12.5 billion. Ling Liong Sik, a former transport minister, has been charged over corruption for causing the government to purchase a piece of land with an additional cost of MYR 720 million. Ling, will receive a 7-year imprisonment sentence if convicted. Three others, including a former port chief were also charged in December 2009. They will also face up to between 10 and 20 years imprisonment if found guilty, as reported in a 2009 news article by Asiaone. According to a July 2011 news article by Bernama, the trial for Ling has already begun on August 1, 2011.

Another scandal that came under the spotlight in January 2011 was the awarding of a MYR 682 million worth contract to Sentosa Jitra Sdn Bhd, which is 50% owned by SP Setia Bhd, the leading property developer, to build 1National Institute of Health (1NIH). According to several January 2011 newspaper sources, such as Free Malaysia Today, SP Setia Bhd was given 40.22 acres of government land, where the 1NIH is scheduled to be built on. The land is estimated at MYR 1.8 billion, which is far beyond the value of the contract and the contract was given without an open tender.

Frequency

The Word Bank & IFC: Doing Business 2011:
- On average, it takes 56 days and 5 procedures to register property, and the cost amounts to 2.5% of the property value.

World Economic Forum: The Global Competitiveness Report 2010-2011:
- Business executives give the protection of property rights in Malaysia, including financial assets, a score of 5.1 on a 7-point scale (1 being 'very weak' and 7 'very strong').

Transparency International: Global Corruption Barometer 2010:
- 12% of the households surveyed reported to having paid a bribe to land services in 2009.

Transparency International Malaysia: Transparency Perception Survey 2007:
- 21% of corporate respondents name the Land Office as the most, the second most or the third most corrupt public institution.