RM950m tax loss: MACC busts massive scrap metal smuggling ring across five states

Malay Mail

18 hours ago

GEORGE TOWN, July 15 — The Malaysian Anti-Corruption Commission (MACC) has launched a major crackdown on scrap metal smuggling syndicates operating in five states, which are believed to have paid bribes to enforcement officers, resulting in an estimated tax revenue loss of over RM950 million to the government.
The raids were carried out by the MACC's Special Operations Division through the Multi Agency Task Force (MATF), in collaboration with the Royal Malaysian Customs Department (JKDM), the Inland Revenue Board (LHDN), and Bank Negara Malaysia (BNM), at 19 locations across Penang, Selangor, Negeri Sembilan, Johor, and Kedah.
The special operation, dubbed 'Op Metal,' also involved personnel from MACC's Anti-Corruption Tactical Squad (ACTS), who raided six sites in Penang yesterday, including residences, offices, and scrap metal storage and processing centres believed to be involved in the smuggling operation.
The first raid, which was also joined by Bernama, was conducted at a three-storey luxury bungalow in Batu Maung around 6 am Monday (July 14), believed to belong to a businessman who owns a scrap metal company.
A domestic helper opened the door after ACTS officers knocked, and a search was conducted with officials, though the company owner was reportedly not home at the time.
Only the man's wife, child, and an elderly woman believed to be his mother were in the residence, while the foreign national was said to be abroad on business for the past two days.
The operations team searched for evidence and documents related to the smuggling activities, while the ACTS team maintained surveillance inside and outside the home to ensure a smooth operation.
Later, members of the media were brought along for a raid on a scrap metal storage and processing site at Jalan Bukit Minyak in Bukit Mertajam around 9 am, just as the premises opened for business.
The ACTS team conducted a thorough inspection of the zinc-fenced facility, which contained scrap metals of various forms, sizes, and types believed to be processed before being exported overseas.
The team gathered nearly 30 employees, including office staff, before conducting further checks. The premises is believed to be linked to the man whose house was raided earlier that morning.
About 15 minutes later, a man claiming to be the site's manager arrived and assured full cooperation, while the operations team carried out further checks and reportedly seized several documents for investigation into the smuggling activities.
Meanwhile, a source said that seven raids in Selangor, four in Kedah, and one each in Negeri Sembilan and Johor targeted other scrap metal centres, offices, and homes of individuals suspected to be involved in the smuggling.
Preliminary investigations revealed that the syndicates exported the scrap metal to India, China, and other countries, but declared it as machinery or other metals not subject to the 15 per cent export tax imposed by the government.
'To ensure the shipments passed inspections and avoided the tax, the syndicates are believed to have bribed several enforcement officers,' the source said.
The source added that the complicity of certain enforcement officers caused the government to lose around RM160 million in tax revenue per year over the past six years, with total losses estimated at over RM950 million.
The number of arrests and seizures from the operation will be updated as investigations are still ongoing.
Meanwhile, MACC chief commissioner Tan Sri Azam Baki confirmed the raids in the five states, which involved factories and companies exporting scrap metal abroad.
He said the case was being investigated under Section 4(1) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLATFPUAA 2001) and that investigations were also focused on identifying individuals, including public servants, who may have protected the syndicate's activities. — Bernama