Malaysia's Mahathir Vows to Investigate Toppled Government

Investors had anticipated the bearish reaction to Dr Mahathir Mohamad becoming prime minister once more

Mahathir sacked and jailed Anwar on charges of sodomy and corruption. She said the full pardon for her father, who is now in a hospital recovering from shoulder surgery, was sought due to a "miscarriage of justice".

Mahathir said after winning a parliamentary seat, Anwar could potentially be appointed to the Cabinet.

The royal palace said in a statement that the monarch had given Anwar a full pardon following advice from the Pardons Board.

However, Dr Mahathir, who now leads the coalition and was sworn in as prime minister on Thursday, has said it may take up to two years for him to hand over the reins as he wants to stick around to fix the problems he sees plaguing the nation.

Mahathir has said he expects to run the government for up to two years during an uncertain transition period but has signalled the reins would be turned over to Anwar eventually.

Anwar, the opposition's de facto leader who is now in jail for a sodomy conviction considered to be politically-charged, agreed to work with his former enemy Mahathir.

In his four-decade career, Anwar has changed his political colors with the readiness of a chameleon in an ambitious pursuit of leadership in the multiethnic, Muslim-majority country.

Mahathir, 92, said he thought that "in a short while" the government could have a case against his predecessor, Najib Razak, who has been dogged by a multi-billion-dollar scandal at state fund 1Malaysia Development Berhad (1MDB).

Anwar said the hardest thing about being in jail was its impact on his family.

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The agenda for the Mahathir government includes scrapping a goods-and-services tax, reviewing large infrastructure projects, reintroducing fuel subsidies and cutting spending. He added that he would make the final decision about cabinet posts.

Anwar is in the People's Justice Party, while Mahathir is in the Malaysian United Indigenous Party, but they are part of the same coalition, Pakatan Harapan (meaning "Pact of Hope").

In an astonishing U-turn previous year, Anwar shook hands with Mahathir and agreed to join forces to oust scandal-tainted Najib.

He maintains his innocence, and says on both occasions Mahathir and Najib turned to trumping up charges against him to keep him out of politics.

Asked if Najib would go to prison, he said: "It all depends on the investigation being made and whether there is a case against him or not". His sentence was set to end 8 June, but last week's unexpected election win, which ended the National Front's 60-year rule, led to his swift release.

"We are now in process of getting into details of matters he suppressed in his time", Mahathir said of Najib.

In the WSJ report published online Tuesday, Dr Mahathir reportedly said he would not offer Najib freedom in an effort to reclaim the missing funds.

Najib, who was chairman of 1MDB's advisory board, denied any wrongdoing and he has been cleared of any offence by Malaysia's attorney general. Mr Najib and his wife were barred on Saturday from leaving the country as a leaked flight plan revealed they were planning to leave for Indonesia.

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