Hornbill Unleashed

December 14, 2013

The bleed from illegal capital outflow must stop

Filed under: Corruption,Politics — Hornbill Unleashed @ 12:00 AM
Tags: , , ,

Chong Zhemin

Washington-based financial watchdog Global Financial Integrity (GFI) in its latest annual report ranks Malaysia as world number four in the world’s top 10 countries of illicit capital outflow coming behind Russia, China and India.

US$54.18 billion (about RM174 billion) was siphoned out of Malaysia in 2011. This astronomical amount is alarming but does not come as a surprise since Malaysia was ranked number two in the 2010 ranking with US$64.38 billion of illicit capital outflow.

If calculated on a per capita basis, Malaysia’s illicit capital outflow is still world number one in 2011 at US$1,852.94 per capita, ahead of Russia (US$1,331.99 per capita), China (US$112.03 per capita) and India (US$68.66 per capita).

In fact, in this year’s annual report, GFI has addressed the re-exports from Hong Kong in estimating trade misinvoicing by Malaysian Traders, making this year’s report more accurate and reliable. This would mean that Malaysia’s illicit capital outflow in 2011 could potentially be a larger sum than in 2010.

The GFI report proves that the Bank Negara Malaysia’s (BNM) move to set up a task force in 2010 to stop illicit funds leaving the country yield futile results.

According to GFI annual report, Malaysia’s illicit capital outflow more than doubled from 2009’s US$34.51 billion to 2010’s US$64.51 billion and US$54.18 billion in 2011. One cannot stop to ponder if this huge jump of illicit capital outflow coincides with the impending 13th General Election which was due in 2013.

Malaysia cannot afford to lose such astronomical amount of money from illicit capital annually, especially in a period where the government is trying to cut back on subsidies on essential goods.
Finance Minister Datuk Seri Najib Razak must put a stop on this leakage and walk his talk by promoting openness and transparency in the country’s financial system.

Among the popular techniques use to siphon illegal funds out includes a web of anonymous shell companies coupled with complicated multi-layered transactions and funds transfer.

If Najib is sincere in tackling the illicit capital outflow and stop the bleed, he must follow the footsteps of UK by creating a central public registry of corporate beneficial ownership information.

Under this move, all firms registered in the country have a legal obligation to hold accurate and current information on the ultimate owner who benefits from the company which will be place on a central register maintained by the Companies House.

By creating a register of beneficial owner, the true owner of these anonymous shell companies will be make public, hence making the crackdown of these ultimate beneficiary and tracking of funds transfer easier.

With Malaysia almost hitting the federal debt limit of debt GDP ratio of 55%, Najib must take a firm and urgent response to stop the siphoning of illegal funds out of the country. Will Najib have the courage and political will to walk the talk and stop the bleed?



  1. 2 % of the super filthy rich Malays and their Chinese and Indian cronies wete siphoning 80% of the estmated dirty and illegal monies abroad while the balance 20% was committed by well connected criminals .

    Comment by Awaken Dayak — December 14, 2013 @ 8:49 PM | Reply

  2. Qte:”How to stop the bleed when corruption”-unQte. Very easy & simple lah, just UBAH…UBAH…UBAH.

    Comment by tiuniamah — December 14, 2013 @ 10:44 AM | Reply

  3. I wish to highlight an important fact regarding the illicit capital outflow,at the same time to refute the lies and fitnahs against the minorities.With millions of minorities working overseas with high paying jobs,most have sent back tons of monies to support their families and the economy of Malaysia ! So,who are the true ungrateful and unpatriotic against those that you have mentioned ! Another stack reality is that the plunderers can always migrate to other countries where they stashed their ill-gotten gains if they don’t like what they will see when the nation is eventually in shambles !

    Comment by Reapusow — December 14, 2013 @ 8:27 AM | Reply

  4. How to stop the bleed when corruption is so deeply entrenched in the system? This is not dealing with a case of ordinary or minor ailment, but a case of cancerous and even life threatening or chronic disease. A major overhaul or the removal of the disease could be fatal. Either major changes be introduced like independence in the judiciary, police and MACC, nothing else can be done except the removal of this rotten, bias and corrupt government. All the mess must be cleaned up, the skeletons in the closets, the dirt under the carpets and the ill-gotten wealth be returned to the country and people.

    Comment by Sharpshooter — December 14, 2013 @ 1:55 AM | Reply

    • Will have to wait till in our next life that will get an independence Judiciary, Police or MACC…..whether its under the current gomen or future gomen (if any).

      Comment by Rod — December 14, 2013 @ 9:42 PM | Reply

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