In a report from Kuala Lumpur, the newspaper said Daim’s talks had been “thrown off the tracks” by the raids, carried out on Wednesday.
Quoting unnamed sources, the newspaper speculated that the raids had been timed, either to embarrass Daim, who wields enormous power as the head of an advisory council, or to exert pressure on China as Malaysia seeks to renegotiate terms of loans from China for two pipeline projects and the East Coast Rail Link.
Daim is in China as Mahathir’s special envoy, to prepare for Mahathir’s official visit next month.
According to the report, Daim was “stumped” when informed by Chinese officials about the raids just moments before his meeting with Foreign Minister Wang Yi, but had maintained that Malaysia remained serious about maintaining strong ties with China
The Straits Times said there was speculation among Malaysian construction executives that China viewed the raids as a strategy to extract concessions, which was denied by Daim’s associates.
Mahathir has accused the previous Najib Razak government of agreeing to lopsided terms favouring Chinese companies in the huge infrastructure contracts for the pipelines and the East Coast railway. He has called for terms to be renegotiated.
Questions were also raised last month about any links to China involving corruption allegations about 1MDB and related companies.
Earlier this month, Mahathir’s Pakatan Harapan-led federal government had suspended work on the projects amidst allegations of corruption and questions about the high cost of the projects, which involve two Chinese government-linked entities, China Petroleum Pipeline Bureau and China Communications Construction Company.
The report also speculated that Malaysian officials aligned to the previous Barisan Nasional government may have instigated MACC to carry out the raids in order to complicate Malaysia’s relations with China.
It also speculated that the raids were a reaction to Daim’s wide powers as head of the advisory Council of Eminent Persons, which also comprises tycoon Robert Kuok, who has close links with China, and former central bank governor Zeti Akhtar Aziz.
It said political factions in the Pakatan Harapan government feared Daim would use efforts at reforming state-owned companies to benefit his supporters and associates.
The MACC raids on Wednesday were in connection with investigations into the Multi-product Pipeline, Trans-Sabah Gas Pipeline and East Coast Rail Link projects. The two pipeline projects involve contracts amounting to RM9.4 billion. The ECRL was originally said to cost about RM56 billion but the new government has said the final cost would amount to RM81 billion.