Michael Peel in Bangkok
Financial Times
February 3, 2016

Najib Razak, Malaysia’s prime minister, tightened his grip on the country’s ruling party on Wednesday after the son of his predecessor, was toppled for what he claimed was criticism of the premier’s involvement in a financial scandal.

Mukhriz Mahathir, son of Mr Razak’s most high-profile critic Mahathir Mohamad, quit as chief minister of the northern state of Kedah after losing the support of his state assembly.

Analysts see Mr Mukhriz’s removal as another sign of Mr Najib’s political strength, despite the efforts of a clutch of senior figures and opposition parties to unseat him.

“It’s revenge for Mahathir Mohamad going against Najib,” said James Chin, director of the Asia institute at the University of Tasmania, who added that Mr Mukhriz was also seen as having performed badly during his three years in office. “Mukhriz had supported his father against the prime minister.”

Mr Mukhriz said in a statement that the “true reason” for the effort to unseat him was his criticism of the premier. The deposed chief minister said “scandal after scandal” in Malaysia was “traumatising all of us”.

Mr Najib’s office said Mr Mukhriz had been forced to resign because of “lack of confidence in his leadership” in the run-up to the next election, which must be held by 2018. “The prime minister believes that the party and government must be disciplined and work together as a united team to combat the economic and security challenges Malaysia currently faces,” the premier’s office said.

Mr Mahathir has led an effort by some political grandees in Mr Najib’s UMNO party to force the prime minister from office, principally over the payment of $680m into the premier’s personal bank account from an unnamed foreign source. The attorney-general last week backed the prime minister’s denial of wrongdoing in receiving the funds, adding that they came from the Saudi Arabian royal family.

Many observers say Mr Mahathir is a problematic leader of a campaign to clean up politics, since cronyism flourished alongside the economy during his 1981 to 2003 premiership. Mr Najib’s supporters say the effort to topple their boss is a political powerplay, rather than motivated by outrage over the $680m or allegations of misappropriation of funds from the 1MDB state investment fund.

Mr Najib’s government has secured his position over the past six months by detaining critics or banning them from travel, removing people involved in the corruption claim investigations from their posts, and shoring up support from the UMNO’s powerful regional chiefs. But the premier’s efforts to contain the scandal have been undermined by announcements from international investigators, including a Swiss statement last week that its probe had found “serious indications” of the misappropriation of $4bn from Malaysian state companies. The Swiss authorities say Mr Najib is not a target of their investigation.