Billionaire Jeffrey Cheah’s Sunway Proceeding With $2.7 Billion IJM Takeover Despite Money-Laundering Probe

Sunway—controlled by Malaysian billionaire Jeffrey Cheah—is proceeding with its 11 billion ringgit ($2.7 billion) takeover bid for Kuala Lumpur-listed construction company IJM, which is facing a money-laundering probe.

The proposed takeover is proceeding in accordance with the SEC’s rules on takeovers, mergers and compulsory acquisitions, Cheah’s company said in a statement to Bursa Malaysia. The takeover offer, which would make Sunway the country’s biggest property and construction firm, has also sparked public criticism.

Shares of IJM rose as much as 8.4% on Thursday in Kuala Lumpur after slumping more than 10% since news of the money-laundering broke out. Sunway shares slipped less than 1% since announcing the IJM bid on Jan 12.

IJM is facing a probe from Malaysia’s anti-graft agency on allegations of a 2.5 billion ringgit money-laundering scheme involving the company, triggered by a separate probe in the U.K. IJM said it’s cooperating with Malaysian authorities and that it’s unaware of any U.K. investigation, describing the allegation as inaccurate.

IJM Chairman Krishnan Tan met with Malaysian Anti-Corruption Commission officers on Tuesday and continues to cooperate fully with the authorities, along with other employees who are assisting in the ongoing investigation, the company said.

News of the money-laundering probe broke out on Monday, a week after Sunway announced its proposed takeover offer to buy IJM’s entire 3.5 billion shares at 3.15 ringgit each in a cash and share deal. The investigation came after Sunway’s offer sparked criticisms that it could dilute the government’s equity interests and the rights of indigenous Malay investors.

With a real-time net worth of $4.5 billion and among Malaysia’s wealthiest, Cheah is seeking to bulk up his construction business as he expands the group’s real estate across the Causeway in Singapore, where Sunway has agreed to buy Singapore developer MCL Land for S$739 million ($578 million) from Hongkong Land Holdings as it deepens investments into one of the world’s most resilient real estate markets.

The self-made tycoon transformed Sunway from an obscure tin-mining company over the last five decades into one of the country’s biggest conglomerates with interests in construction, education, healthcare, infrastructure and real estate.