Malaysia’s anti-corruption agency is seeking to charge two unnamed individuals over a 1.1 billion ringgit (US$278 million) semiconductor deal with British chip designer Arm Holdings, as former economy minister Rafizi Ramli returned for a third day of questioning in the same probe.
The Malaysian Anti-Corruption Commission (MACC) said the investigation was nearing completion after officers recorded statements from 22 witnesses, including Rafizi and his former aide, political analyst James Chai.
Individuals linked to the deal – signed under the economy ministry last year and billed as part of Malaysia’s push to move up the semiconductor value chain - are being investigated for alleged abuse of power, cheating and criminal breach of trust.
“We have identified two individuals whom we will propose [for them] to be charged in court,” MACC chief commissioner Azam Baki told reporters on Wednesday. “I am not saying they will definitely be charged. Investigators can recommend charges if the evidence suffices, but the final decision rests with the attorney general.”
However, Azam did not name anyone when pressed by reporters. He said: “Whoever wants to speculate, that is up to them. We do not.”
Azam said investigation papers were near completion and expected to be sent to prosecutors “in the near future”, pending two remaining witnesses – one in Taiwan and one in Malaysia.
Outgoing MACC chief Azam said his officers “are looking at the criminal elements”, adding that “if there is evidence, it is up to the attorney general to decide the next action”.
The case began with complaints by NGOs that the project had been rushed and structured on terms that could expose Malaysia’s public finances.
The inquiry centres on the 2025 strategic partnership with Arm, one of the world’s most important semiconductor design firms. The arrangement gave selected Malaysian firms access to Arm’s intellectual property licences and computer subsystems over 10 years, with Arm receiving royalties from chips sold under the programme.
Then economy minister Rafizi billed the agreement as a way to train 10,000 integrated circuit design engineers and create a new generation of Malaysian chip companies.
Reuters reported at the time that Malaysia would pay Arm US$250 million over 10 years for chip design blueprints, including seven high-end designs, with a target of building 10 local chip firms and each capable of generating US$1.5 billion to US$2 billion in revenue annually.
Arm twist
The deal dovetails with Prime Minister Anwar Ibrahim’s call for a “second semiconductor wave” for Malaysia, a country that accounts for 13 per cent of the world’s chip testing and packaging, according to Malaysian authorities in 2024, and is aiming to play a larger role as US-China tech rivalry reshapes supply chains.
In 2024, Anwar set a target of attracting at least 500 billion ringgit in semiconductor investment.
But the Arm probe has since become entangled with Malaysia’s recent political developments. Rafizi, once one of Anwar’s top lieutenants, resigned from government in 2025 and has grown more critical of the administration.
He has denied wrongdoing and suggested the investigation was politically motivated.
“We will go through the process. We have nothing to hide, and if this ends up in court, I am confident we have a strong case,” Rafizi told reporters on Monday. “If MACC decides to charge me based on its case, we will defend ourselves in court.”
In an earlier post, he said there was “no monetary motive” and “no money involved”, adding that a trial would be “long and fascinating” because many of the country’s top leaders could be called as witnesses.
Rafizi returned to MACC on Wednesday for a third day of questioning, telling reporters before entering the building that investigators had not asked him about money flows or payments, contrary to earlier claims.
“There were no questions on financial transactions. As I’ve said, the questions so far have been about joint venture decisions and procedures,” he said.
In a social media post on Tuesday night, he said the sessions were “long, really long, 9 to 10 hours a day”, but they proceeded smoothly. “After two days of questioning, I am calmer than before,” he wrote.
He recalled being detained repeatedly during his years as an opposition campaigner, saying “the powers in Putrajaya sometimes forget” he had been in and out of lock-ups barefoot in his 30s.
“Sitting in an air-conditioned room for hours is actually more comfortable than standing 10 hours a day giving speeches on a truck from morning to night to help free those [who are now] in power,” Rafizi wrote.