PETALING JAYA: A billion-ringgit diesel theft ring that siphoned government subsidies for nearly a decade has been crippled, with investigators warning the true losses could far exceed the RM247 million already uncovered.
The syndicate, which abused its operating licence by channelling subsidised fuel from Sarawak into the black market, was taken down under Ops Karen, a joint crackdown led by the Malaysian Anti-Corruption Commission (MACC) and the Multi-Agency Task Force (MATF).
MACC chief commissioner Tan Sri Azam Baki said intermediaries, including fishermen, were roped in to transfer fuel into tankers and avoid detection.
Several company directors, some with honorific titles such as Datuk, along with senior executives, are among those implicated.
“Misusing subsidies means stealing from the people, since those funds were meant to benefit citizens,” Azam said, adding that penalties and fines could push recoveries into the billions.
He said the bust followed real-time financial monitoring that flagged unusual transactions.
“We traced the flow of funds, supported by public tip-offs. After extensive monitoring and surveillance, we succeeded in dismantling their activities,” he added.
Ops Karen also exposed a customs officer in Port Klang accused of soliciting bribes from a shipping agent to fast-track container clearance.
Records and communication devices seized revealed a pattern of illicit payments.
Azam stressed that the company was licensed, but abused its privilege to mask large-scale smuggling.
The firm and its executives are being investigated under the MACC Act 2009, while the Inland Revenue Board will probe possible tax evasion. The Domestic Trade and Cost of Living Ministry is also expected to act against misuse of subsidised fuel.
“I believe the Domestic Trade and Cost of Living Ministry should blacklist this company,” Azam said, adding that enforcement would be coordinated across agencies.
Although not formally registered as a crime syndicate, MACC intelligence links the company to organised criminal groups that smuggled diesel out of Sarawak, particularly from Bintulu.
“They even recruited fishermen to help move the fuel into tankers,” Azam revealed.
He said the operation was the outcome of months of intelligence gathering, adding that investigators are now reviewing accounts going back 10 years to trace possible money laundering.
Azam also revealed that the MATF has seized more than RM1.6 billion in funds and assets since its establishment last year. Of this, RM705.55 million was confiscated in operations targeting corruption and money laundering since 2024.
“In the same period, 61 individuals were arrested, including 34 civil servants.
“Of these, 25 have been charged in court, while disciplinary action has been taken against another eight,” he said.
In 2025, the task force has seized RM960.73 million in funds and assets through a string of high-profile operations nationwide.
Azam warned that subsidy theft undermines government finances and directly impacts Malaysians.
“Those subsidies belong to the people. When they are stolen, it is the public who suffers” he said.
