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Najib drops Muhyiddin as deputy prime minister, sacks A-G

Home Minister Ahmad Zahid made No 2; PAC chairman promoted to Dy Home Minister

Following his promotion, shares of public listed companies believed to be linked to Mr Ahmad Zahid, a popular Umno vice-president, enjoyed a boost on Tuesday.

Kuala Lumpur

MALAYSIAN Prime Minister Najib Razak on Tuesday dropped Muhyiddin Yassin as Deputy Prime Minister and replaced him with Home Minister Ahmad Zahid Hamidi in an anticipated cabinet reshuffle seen as an attempt to consolidate his position.

Mr Najib, who has been under siege since the 1MDB saga broke, also dropped four other ministers from the new line-up and rewarded loyalists - bringing in seven new ministers and nine deputies - as part of what he said was "a difficult decision but necessary so that a united Cabinet can move forward".

In addition to dumping his deputy, Mr Najib also sent ripples through the country with changes affecting individuals involved in the current probes into the 1MDB affair.

Attorney-General Gani Patail - who is only three months away from retirement - was replaced with former federal court judge Mohamed Apandi Ali, "due to health reasons".

Mr Gani, who is part of a special inter-agency taskforce probing 1MDB, appeared to be taken by surprise.

A lawyer who did not want to be named said that Mr Gani has kidney problems, but noted cryptically that the 65-year-old Mr Apandi - a former Umno state legal adviser - "would be a good person for the PM to have".

Separately, four members of Parliament's bipartisan Public Accounts Committee (PAC), which has an on-going probe into 1MDB, were also made ministers or deputies in the Cabinet reshuffle. PAC chairman Nur Jazlan Mohamed - seen as more objective than previous heads - was made Deputy Home Minister.

Given that a third of the committee has now been promoted, it remains to be seen how PAC will go about the 1MDB probe when it meets again.

As prime minister, Mr Najib has the prerogative to reshuffle his Cabinet, but analysts question the timing and manner in which it was done.

Many saw the sudden removal of Mr Gani - who has the discretion whether to prosecute those involved in alleged wrongdoings related to 1MDB - as interference.

"It seems to imply the prime minister wants only to silence his critics and to stop any possible criminal prosecutions," Institute for Democracy and Economic Affairs (Ideas) chief executive Wan Saiful Wan Jan said. "This move indicates desperation. It is bad for the country as it raises questions about the integrity of the government. I fear the impact on our socio-political and economic environment."

National Human Rights Society (Hakam) president Ambiga Sreenevasan was also critical, seeing the latest actions as continuing evasion by Mr Najib of allegations on 1MDB even as he worsens the crisis.

In a televised announcement, Mr Najib said: "I can accept differences of opinion and criticism as part of the decision-making process, but as Cabinet ministers, differences of opinion shouldn't be publicly expressed as it can affect the public's perception of the government."

It also went against the concept of "collective responsibility", he said.

A phlegmatic Mr Muhyiddin responded to his sacking with a statement: "If I was dropped for my stand on this issue (1MDB), I accept it."

Mr Muhyiddin had on Sunday delivered a speech at an Umno divisional meeting, warning that the ruling Barisan Nasional coalition would lose an election if it was called now, due to 1MDB, which has racked up RM42 billion (S$15 billion) in debt.

But businesses may be more sanguine about the latest developments.

Philip Capital Management chief investment officer Ang Kok Heng said: "As long as government policies remain intact, there should be little impact on businesses."

Analysts see the latest manoeuvres as signs that the gloves are off for the 62-year-old prime minister amid investigations into 1MDB. There have been allegations that nearly US$700 million linked to the company were deposited into Mr Najib's personal bank accounts at Ambank. Mr Najib, who is also the finance minister and chairman of 1MDB's advisory panel, has denied the allegations.

As for his former deputy, all eyes are on his next move. Ideas' Mr Wan Saiful said that at the party level, Mr Muhyiddin could initiate steps for a party EGM to pass a "no confidence" vote against Mr Najib, or in Parliament at the next sitting. "This too would create a serious and unprecedented crisis in the country."

The 68-year-old former mentri besar of Johor and Umno deputy president now appears to have swung to the side of former prime minister Mahathir Mohamad who is bent on unseating Mr Najib following the scandals at debt-laden 1MDB. On Sunday, he mockingly referenced 1MDB's RM42 billion borrowings by describing the entity as a "sovereign debt fund".

As for Mr Ahmad Zahid, a popular Umno vice-president, it was under his watch when the home ministry last week suspended the publishing permits of The Edge Weekly and The Edge Financial Daily for three months on the basis that their reports on 1MDB were prejudicial to the country.

Following his promotion, shares of public listed companies believed to be linked to him enjoyed a boost on Tuesday. They include penny stock firms Tekala Corp and Kretam which surged 30 and 11 per cent respectively, against a 0.6 per cent dip in the benchmark KLCI.

With the reshuffle, Malaysia's Cabinet is at a record size with 37 full ministers.