Malaysia’s IJM denies UK probe, money laundering claims amid graft investigation

[KUALA LUMPUR] Malaysia’s construction giant IJM Corp dismissed money laundering allegations and denied being investigated by UK authorities, after Malaysia’s anti-graft agency launched a probe into claims of a RM2.5 billion (S$789.5 million) scheme, clouding sentiment just days after the company became a takeover target.

“The company and its UK associates are not aware of any investigation by the UK’s Serious Fraud Office (SFO). We have not been approached and any reports suggesting otherwise are inaccurate,” IJM said on Tuesday (Jan 20), as quoted by Malaysian daily The Star.

The diversified group, which spans construction, property, industry and infrastructure, also denied allegations that it was involved in money laundering, describing the claims as unfounded.

It said that its UK investments since 2012 were funded primarily through facilities raised from Malaysian financial institutions, and channelled to project special-purpose vehicles in the UK. These investments were subject to the group’s established business evaluation and internal governance processes, it added.

The statement followed a report by state news agency Bernama on Monday that the Malaysian Anti-Corruption Commission (MACC) had identified a member of IJM’s top management holding a Tan Sri title, along with a “company adviser”, as persons of interest in relation to an alleged RM2.5 billion money laundering scheme.

The MACC has also confirmed freezing bank accounts totalling RM15.8 million as part of its ongoing probe into the company, according to media reports.

Other reports had claimed that UK authorities were investigating alleged money laundering and corruption involving multibillion-ringgit transactions linked to the two individuals.

IJM clarified that the individual described as a “company adviser” was previously engaged only on a professional basis to provide advisory services for a limited number of corporate transactions.

According to the company, IJM chairman Krishnan Tan met MACC officers earlier on Tuesday, and the company continues to cooperate fully with the Malaysian authorities. Other personnel who have been requested to provide information are also assisting, it added.

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Shares of IJM extended losses on Wednesday after plunging as much as 16.4 per cent on Monday. The stock slid to an intra-day low of RM2.43 before trimming losses to close 3.1 per cent lower at RM2.49.

IJM said that its operations remain unaffected by the investigation. “Business operations continue as usual,” it noted, adding that it remains committed to high standards of corporate governance, transparency and integrity.

The probe comes at a sensitive time for the company, following an announcement that Sunway Berhad has proposed a share-and-cash takeover valuing IJM at slightly over RM11 billion.

While the investigation has weighed on market sentiment, analysts say that the offer cannot be withdrawn at Sunway’s discretion.

Hong Leong Investment Bank analyst Edwin Woo said under Malaysia’s takeovers and mergers code, an offeror may only cancel or withdraw a takeover offer with prior written consent from the Securities Commission (SC) Malaysia.

“A worst-case scenario to our knowledge would entail either withdrawal in writing to the SC or failure to obtain shareholders’ approval at an extraordinary general meeting, resulting in Sunway being prohibited from making another takeover offer for the next 12 months,” the bank said in a note on Monday.

Conversely, under a best-case scenario, Woo anticipates significant risks regarding the deal’s completion timeline. While the acquisition was originally scheduled to conclude in the third quarter of 2026, the ongoing investigation is expected to necessitate more intensive due diligence procedures, likely resulting in a delay.