The Malaysian Anti-Corruption Commission is probing the MYR1.11 billion (US$250 million) agreement with UK-based Arm Holdings amid seizures, arrests, and political fallout. The government maintains the Cabinet-approved deal is still in force, and ministers have pledged cooperation with investigators.
MACC opens probe and seizes funds
The Malaysian Anti-Corruption Commission (MACC) opened a formal investigation after three Malay non-governmental organisations filed complaints alleging misappropriation linked to the March 2025 Arm Holdings agreement, according to The Edge and Bernama.
Bloomberg reported on February 12 2026 that MACC officers seized about MYR5 million from a safe house linked to a prominent politician. The commission also arrested a former Army chief as part of a broader enforcement activity. MACC deputy leadership confirmed the agency was reviewing submitted documents and evidence before deciding on next steps.
Government stands by Cabinet decision
Economy Ministry officials stressed that the Arm agreement was a Cabinet policy decision and remains in force while the probe proceeds. Economy Minister Akmal Nasrullah Mohd Nasir indicated the ministry would provide documentation and cooperate fully with investigators, according to The Edge and Bernama. Both outlets noted the government views the deal as central to a long-term strategy to build Malaysia's front-end semiconductor design capabilities and grant local firms access to Arm's intellectual property.
Political fallout and legal threats
Former Economy Minister Datuk Seri Rafizi Ramli, who negotiated the Arm deal while in office, has been linked to the investigation. He reportedly threatened legal action if accusations did not result in court charges, The Edge reported. Rafizi framed the matter as a broader dispute over the use of anti-corruption tools in political contests, contending that such allegations are sometimes deployed as intimidation rather than to pursue prosecutable cases.
Investor confidence and sector ambitions at stake
Officials acknowledged reputational risks and the probe's potential impact on investor sentiment. The Economy Ministry reiterated its focus on executing the agreement's objectives, including talent development targets and phased IP access. Bernama noted that two companies had already been granted IP access in the initial phase, with the ministry continuing to build local capacity in chip design under the 13th Malaysia Plan.
Questions over MACC conduct
Bloomberg placed the Arm investigation in the context of broader criticism of MACC's practices and leadership. The outlet detailed allegations that certain factions within MACC had been used to intimidate business figures, and that networks of businessmen and officials had leveraged enforcement for corporate advantage. Bloomberg cited internal memos and sources linking senior MACC officials to private actors. The coverage also referenced controversy over MACC chief Tan Sri Azam Baki's alleged excess shareholdings and the agency's leadership changes.
Agencies cooperate as deal presses on
The ministry and government agencies confirmed cooperation with the MACC inquiry. Officials noted that the Cabinet directive underpinning the Arm deal means implementation will continue regardless of the investigation. MACC leadership said it would review complaints and evidence before determining next steps. Government statements framed the Arm partnership as strategic and necessary to move Malaysia up the semiconductor value chain.
Outlook: charges, clarity and investment climate
The situation remains fluid. Reported seizures and arrests have intensified calls for transparency and due process. Critics have signalled readiness to pursue legal remedies if the probe does not lead to court proceedings. Government officials, meanwhile, have stressed the need to preserve investor confidence and keep the Arm agreement on track. Whether the inquiry ends in charges, sanctions, or exonerations — and what that means for Malaysia's semiconductor ambitions — will be closely watched.
Article edited by Jerry Chen
