MALAYSIA’S anti-graft authorities have proposed a major overhaul of the country’s legal framework to tackle growing concerns over the misuse of public funds, including donations collected by non-governmental organisations.
The Malaysian Anti-Corruption Commission (MACC) said at least three new laws are needed to address loopholes that could enable large-scale corruption, particularly in the absence of robust oversight of public fundraising activities.
Chief Commissioner Azam Baki said the first proposed legislation would focus on misconduct in public office, aimed at preventing improper behaviour among civil servants that could lead to serious criminal offences.
He said a second proposal involves the introduction of a Welfare Act to regulate charitable activities and prevent abuse of public donations.
“This Act is proposed as an effort to prevent the misuse of funds collected from public donations by those who claim to represent NGOs, raising money supposedly to be channelled to the less fortunate,” he said.
A third proposed law would address political financing, which Azam described as essential to preventing conflicts of interest, corruption and undue influence within Malaysia’s political system.
“The existence of laws such as the Public Office Misconduct Act is seen as capable of making various forms of misappropriation or negligence by government staff involving public funds a clear criminal offence.
“This Act is specifically intended to address leakages and misconduct involving funds that are meant to reach the people, as highlighted in every Auditor-General’s Report (LKAN),” he added.
Azam further proposed the establishment of a Welfare Commission to oversee charitable funding and ensure proper governance of donations from both the public and corporate sectors.
“This is because the MACC has detected concerns over the increasing misuse by parties who have access to these donated funds.
“Political financing is also not a new issue, as it had been discussed even before the 15th General Election, but has yet to be implemented by the government. However, the issue remains worrying and has drawn calls from many parties for stricter legislation.
“It includes the need to disclose political donations and loans to prevent conflicts of interest, corruption and undue influence in politics,” he said.
The proposals come amid a rise in cases involving alleged mismanagement and misuse of public donations, with authorities increasingly concerned about the scale and sophistication of such activities.
Azam revealed that more than five NGOs are currently under investigation, including organisations raising funds purportedly for humanitarian causes such as Palestine.
He added that individuals, including social media influencers, have also been identified as actively soliciting public donations under the guise of charitable work.
“Public fundraising or crowdfunding activities are becoming more widespread, thereby creating opportunities for misappropriation due to the absence of transparent checks and balances,” he added.
While Malaysia already has several laws addressing corruption and financial misconduct, Azam noted that these are insufficient to deal with complex cases involving large-scale public fund abuse.
He pointed to existing legislation such as the Malaysian Anti-Corruption Commission Act 2009 and the Penal Code, which include provisions to prosecute abuse of power and criminal breach of trust, including under Section 409.
Additional safeguards exist under the Financial Procedure Act 1957 and the Public Finance and Fiscal Responsibility Act 2023, which aim to strengthen fiscal discipline, transparency and the sustainability of national finances.
“FRA 2023 is an important law enacted to ensure fiscal discipline, transparency and the sustainability of the nation’s finances, particularly in the management of deficits, government debt and public expenditure.
“It functions as a ‘national financial discipline framework’ to ensure that the government does not spend irresponsibly using public funds,” he said.
He added that the law also aims to prevent the accumulation of off-balance sheet liabilities, including government guarantees, concession compensation and bailouts involving government-linked companies and large-scale projects.
“It also prevents large-scale fiscal decisions from being made without a long-term legal framework,” he said.
Despite these measures, the commission maintains that more targeted and comprehensive legislation is required to address emerging risks and close gaps that could otherwise enable grand corruption to take root. - March 23, 2026
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