KUALA LUMPUR, June 5 — Transparency International Malaysia (TI-M) today expressed concern over the increasing use of compounds, settlements and charge withdrawals in corruption-related cases, warning that repeated reliance on such mechanisms without adequate public explanation risks weakening confidence in anti-corruption institutions and perceptions of accountability.

In a statement, the anti-graft watchdog said recent reports, including a case involving a former public official who was freed from a bribery charge after paying a compound, had raised concerns about how corruption-related cases are being resolved.

While acknowledging that Malaysian law permits compounds and other discretionary mechanisms in certain circumstances, TI-M said there must be greater transparency, consistency and public confidence in how such powers are exercised.

“While asset recovery serves an important public interest objective, recovery alone should not be regarded as a substitute for accountability,” TI-M president Raymon Ram said in a statement.

“Corruption is not merely a financial loss to be recovered. It is an abuse of entrusted power that undermines public institutions, weakens governance, and erodes trust in the rule of law.”

TI-M said it has repeatedly voiced concerns over the use of compounds, settlements and discontinuance arrangements in corruption and corruption-linked cases, particularly where such outcomes may affect public perceptions of accountability and the equal application of the law.

The organisation pointed to several corruption and corruption-linked cases over recent years that were resolved through compounds, settlements, asset recovery arrangements or prosecutorial withdrawals. 

These included the discontinuance of a 1MDB-linked money laundering prosecution in 2020 following an asset recovery arrangement, the acquittal and discharge of a senior political figure after paying a RM1.1 million compound in 2021, and the acquittal and discharge of an individual facing corruption and money laundering charges after paying a RM4.1 million compound in 2025.

TI-M also referred to the recent public endorsement of a recovery-first approach in financial crime and tax-related enforcement matters involving RM900 million and RM28 million in penalties and compounds.

While noting that each case involved its own legal and evidential considerations, TI-M said the cumulative effect had contributed to a growing public perception that certain corruption and corruption-linked matters were increasingly being resolved through negotiated financial outcomes rather than judicial scrutiny.

The group acknowledged that the Attorney General, acting as Public Prosecutor, has broad prosecutorial discretion under Article 145(3) of the Federal Constitution and that certain offences may be compounded under existing legislation, including provisions under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001.

However, TI-M said the existence of such powers did not diminish the need for transparency, consistency and public confidence in how they are exercised, particularly in corruption and corruption-linked matters.

The organisation warned of the risk of normalising what many Malaysians increasingly perceive as a “pay-to-settle” culture, saying repeated reliance on financial settlements without sufficient public explanation could create the perception that accountability can be negotiated.

TI-M said such perceptions risk weakening deterrence, eroding confidence in anti-corruption institutions and fostering a belief that accountability can be negotiated rather than determined through due process and judicial scrutiny.

Referring to Malaysia’s improvement in the Corruption Perceptions Index earlier this year, with its score rising from 50 to 52 points, TI-M said sustainable progress would require more than asset recovery and headline achievements.

It called for greater transparency from the Attorney General’s Chambers and the Malaysian Anti-Corruption Commission whenever corruption-related charges are discontinued following compounds, settlements or recovery arrangements.

TI-M also urged the publication of clear guidelines governing the use of such mechanisms in corruption-related cases, stronger oversight and reporting of discretionary settlement arrangements, and faster implementation of institutional reforms, including separating the functions of the Attorney General and Public Prosecutor.

“This is not a call to abandon legitimate asset recovery efforts,” Raymon said.

“Rather, it is a call to ensure that recovery complements accountability and does not become perceived as a substitute for it.”

He added that Malaysia’s anti-corruption efforts must not only be effective, but must also be seen to be fair.

“At a time when the nation is striving to strengthen integrity and confidence in its institutions, accountability must remain clear, transparent, and consistently applied,” he said.