Malaysia drops corruption charges against PM Anwar's ally

Former Malaysian deputy prime minister Ahmad Zahid Hamidi waves to his supporters at the Kuala Lumpur High Court

By Rozanna Latiff and A. Ananthalakshmi

KUALA LUMPUR (Reuters) - Malaysian prosecutors dropped corruption charges against Deputy Prime Minister Ahmad Zahid Hamidi on Monday, letting the leader of a key partner in the ruling coalition to walk free and raising questions over Prime Minister Anwar Ibrahim's promise to fight graft.

Anwar needs the support of Ahmad Zahid's United Malays National Organisation to maintain a parliamentary majority, and the prosecutors' decision to drop the case will invite scrutiny over the government's stance on corruption cases against other UMNO leaders, notably former Prime Minister Najib Razak.

Najib is serving a 12-year prison sentence for graft linked to the multi-billion dollar scandal at state fund 1MDB and faces more bribery charges.

The Kuala Lumpur High Court allowed a prosecution request to grant Ahmad Zahid - who was facing 47 charges of criminal breach of trust, bribery and money laundering - a discharge not amounting to an acquittal, after the Attorney General's Chambers (AGC) chose not to continue pursuing the case.

State news agency Bernama reported that the prosecution made the request to halt the case as they wanted to investigate the case in depth.

The discharge comes even after the court said in January last year that the prosecution had succeeded in establishing an initial case against Zahid and had asked him to enter his defence. Ahmad Zahid had pleaded not guilty to all charges, and UMNO said he was a victim of political persecution.

The AGC did not immediately respond to a request for comment. Hisyam Teh Poh Teik, a lawyer for Ahmad Zahid, said his team will ask the court for a full acquittal.

The UMNO was voted out for power for the first time in Malaysia's history in 2018 due to widespread anger over corruption allegations against Najib and Ahmad Zahid.

The two were the highest profile of all the high-ranking officials charged soon after losing power.

Despite the corruption charges, Anwar appointed Ahmad Zahid to the second-highest office in the country. Anwar's party failed to win a majority on its own in last year's election, prompting him to partner with the UMNO party.

Anwar has said he would not interfere in the court process.

(Reporting by Rozanna Latiff and A. Ananthalakshmi; Editing by Kanupriya Kapoor)