The arrests this week of a government minister and a high-profile tycoon show that new Prime Minister Abdullah Ahmad Badawi is backing his pledge to crack down on corruption with unexpected vigour.

The swift action by Abdullah, who has been in power little more than 100 days since taking over from veteran leader Dr Mahathir Mohamad, won plaudits today from opposition parties, economists and Western diplomats.

The first shock came with the arrest on Monday of the former head of troubled steel giant Perwaja, Eric Chia, eight years after anti-corruption authorities began an investigation into Malaysia's biggest and longest-running financial scandal.

Chia, 71, a businessman close to Mahathir, was taken to court the next day where he pleaded not guilty to embezzling RM76.4 million from Perwaja Rolling Mill and Development in 1994 when he was managing director.

Malaysia's business and political communities were still digesting this news when the Anti-Corruption Agency (ACA) early today arrested Lands and Cooperative Development Minister Kasitah Gaddam, who was appointed by Mahathir in 1998.

Within hours Kasitah was in court pleading not guilty to charges of corruption over share transactions involving millions of dollars dating back to 1996 when he was chairman of the state-owned Sabah Land Development Board on Borneo island.

Good for investment

The action in two such high-profile cases dating back to the years when Mahathir was in power surprised critics who were sceptical of Abdullah's promise in his first speech to parliament after taking power that he would be ruthless with corrupt officials.

Many doubted his ability or willingness to take on powerful forces within the government and the faction-ridden ruling Umno, which had been accused of graft for years.

"What is clear now is that Abdullah's projects are not just words. These arrests show that he is prepared to take action," a Western diplomat told AFP .

Federation of Malaysian Manufacturers vice president Paul Low said: "We welcome the new administration's anti-corruption drive. It will make Malaysia more attractive to foreign investors."

Opposition parties, which had long accused Mahathir's administration of turning a blind eye to corruption, also welcomed the arrests.

DAP secretary-general Kerk Kim Hock said Kasitah's arrest was "yet another signal that Abdullah is serious in the war against corruption.

"Many Malaysians had thought that if they were in power, they could commit corruption and get away with it. This is a strong message that even if you are a minister you will not get away now."

Previously denied

A central committee member of the hardline opposition Islamic party PAS, Hatta Ramli, said the party supported Abdullah's action and hoped for more arrests.

"The charge against Kasitah in court shows that there is foul play, nepotism and cronyism in the government. All this was denied when Mahathir Mohamad was in power."

A member of the supreme council of Abdullah's Umno, Sharil Samad, said he was sure the premier had the support of party members.

"He means what he says. It means no one, whether a high ranking official or someone in a position of power, will stop him from acting."

Abdullah's move to clean-up graft comes as he gets ready to face general elections, which must be called by the end of the year but are widely expected to be held within months. - AFP