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The two feuding top leaders of MCA, the second largest component party in the ruling government, have agreed to step down from their posts before the general election under the 'second phase' of a peace plan proposed by Prime Minister Dr Mahathir Mohamad.

Party insiders told malaysiakini that president Dr Ling Liong Sik ( left ) and deputy president Lim Ah Lek ( right ), had been given a memorandum on the 'retirement plan' by the premier at numerous meetings over the past few weeks.

The memorandum also stated that both Ling and Lim should bury the hatchet once the plan is implemented.

This condition is part of the effort to arrest the decline of the party's image in recent months so that MCA could deliver the Chinese vote to the Umno-led ruling coalition, Barisan Nasional, in the general election that is projected for 2004 or earlier.

According to high-ranking party sources, the memorandum would require the two outgoing leaders to agree on a successor to the party presidency.

It is learnt that Lim had signed the memorandum when it was first put forward to him about two weeks ago. However, Ling had only signed the document as recent as early this week, just before Mahathir left for his visit to Japan.

Though the deal has been sealed now, the party leadership is expected to continue "working towards peace and unity" within the party, namely proceeding with the party polls as scheduled but with no contest for all posts.

Plan kept under wraps

However, the announcement of the duo's retirement will not be made before the party's June 29 annual general meeting.

"It will only be made known at least three months before the general election because a new team will need time to re-establish order within the party and get its machineries going," said one high-ranking source.

Furthermore, the source who requested anonymity said the fact that Ling and Lim are leaving after the party's AGM will give them a "glorious exit" as they would have been 'elected' for another term by then.

Following this, the 42 remaining members of the central committee will meet and use the power provided under Article 40 of the party constitution to fill up the vacancies left by the resignations.

It is believed that two vice-presidents, Chan Kong Choy ( left ) and Ong Ka Ting ( right ), who are the protegés of Lim and Ling respectively, will be promoted to the top posts.

According to sources, the other two more senior vice-presidents, Dr Fong Chan Onn ( left ) and Chua Jui Meng ( right ), are unlikely to fill the top spots.

Ling has been the transport minister and MCA president since 1986 while Lim, who has been the party No 2 since 1996, was the human resource minister from 1989 to 1999.

Observers noted that the duo's relationship began to deteriorate over succession within MCA two years ago.

Lim had claimed that Ling had initiated a succession talk, during which the party chief was said to have expressed his wish not to serve beyond 2002.

Lim later found himself being criticised by some pro-Ling party members as 'pressuring the party chief to step down'. However, Ling did not come to Lim's defence but chose to set aside the succession agreement in the name of "party unity and stability".

Fear of Chinese backlash

It is also believed that when Lim decided to step down from his ministerial post in 1999, he had been assured that Chan would be made the replacement. But the post was instead given to another Ling loyalist, vice-president Fong.

When MCA took over two Chinese newspapers last May, the party was split openly into two camps — the Ling-led 'Team A' which supported the deal and the Lim-led 'Team B' which opposed it.

Subsequently, in the run-up to the party election, Team B claimed that hundreds of thousands of phantom members had been recruited to 'help' Team A leaders in securing their posts. But Team A said it was an unfounded allegation by 'insecure' Team B leaders who wanted to derail the party polls.

For months, both factions were throwing accusations at each other in the media. Team B threatened to expose evidence of phantom members at an extraordinary general meeting in April.

Fearing a backlash in Chinese support for the BN, Prime Minister Mahathir then stepped in as 'mediator' to end the year-long bickering.

Last month, both sides were made to agree to a peace agenda by the premier which, among others, imposed a no-contest ruling for all party posts.

'Retirement agreement'

Another source said Ling's willingness to ink the 'retirement agreement' at the Prime Minister's office in Putrajaya this week was related to the return of businessman Soh Chee Wen to Malaysia last Tuesday.

Soh had been on the run since 1999 after he was charged with defrauding a now defunct stockbroking firm Omega Securites Sdn Bhd of more than RM500 million.

A warrant of arrest was subsequently issued and Soh then turned up on Interpol's wanted list.

Before he fled the country three years ago, Soh had alleged that he was grooming Ling's eldest son Hee Leong as a corporate figure as well as making money in various business deals for the Ling family.

He claimed to have been awarded, in return, numerous government projects as well as an appointment as a member in the MCA central committee and presidential council.

The source said Soh's allegation, if true and exposed, could prove embarrassing to the government and detrimental to Ling, both as a party chief and a full minister.

A day before Soh came back last week, he told a local tabloid that his mission was to "tell all" to clear his name.

But since his return, sources noted that Soh has yet to spill the beans much as he would love to, and that it was probably pending "further instructions from certain quarters".

Alternative charge

Soh is currently on a bail of RM2 million after he claimed trial at the Shah Alam Sessions Court last week. The trial is scheduled for Nov 18. His two offences are punishable with a fine of not less than RM1 million and a maximum jail term of 10 years.

Many believe that Soh's trial is linked to that of his former business colleague, Tony Tiah Thee Kian, who was TA Securities Bhd executive chairperson.

Just four days before Soh's return, Tiah had pleaded guilty to an alternative charge of allowing a false report to be submitted by his company to the Kuala Lumpur Stock Exchange.

Following his admission, the prosecution dropped its principal charge in 1999 that accused Tiah of abetting Soh in using a scheme to defraud Omega Securities.

Last Wednesday, at a press conference, when asked if Soh's return may impact the MCA leadership, Ling had said, "I frankly don't think so. I have nothing to do with him in business dealings, and he has nothing to do with me in his business dealings, too."

Two days later, Soh hit back by dismissing Ling's statement as "utter nonsense" and "total rubbish".