Reputation Is Not Immunity: Why the iRPS Investigation Is Not “Victimisation”

The Malaysian public was surprised and even shocked by the circulation of photographs and videos showing Tan Sri Dr Daud Bakar wearing the orange MACC T-shirt, escorted by officers to court for a remand hearing. 

For many, the images were jarring. Daud Bakar is widely known not as a politician or corporate raider, but as a globally recognised Islamic finance scholar, a figure associated with Shariah governance, advisory boards, and moral authority. 

The immediate emotional reaction was therefore sympathy, followed by disbelief. It is within this emotional space that a narrative of victimisation has begun to take root. 

Supporters of Daud Bakar have framed the investigation by Tan Sri Azam Baki and the MACC as persecution rather than process. 

The argument is familiar: his personal character, international standing, and scholarly contributions to Islamic finance supposedly place him beyond suspicion. From this perspective, any investigation is portrayed not as due process, but as harassment.

This line of reasoning is deeply flawed — legally, intellectually, and ethically.

To be clear at the outset, being investigated does not mean guilt, and no one should prejudge the outcome of ongoing proceedings. 

But it is equally dangerous to suggest that good character, reputation, or scholarship should shield any individual from investigation, particularly where there are credible allegations involving large sums of investor funds.

Character is not a Jurisdictional Defence

Supporters often cite Daud Bakar’s stature as a globally respected Islamic finance authority, his advisory roles, and his academic credentials. These are not in dispute. However, character evidence is not a bar to investigation. 

In law, it never has been.

MACC does not investigate bad people; it investigates alleged conduct. The MACC Act exists precisely because fraud, misappropriation, and abuse of trust frequently occur within respectable institutions, led by individuals with strong reputations. 

History shows, repeatedly, that credentials and moral standing can coexist with serious financial misconduct — especially where complex instruments and opaque structures are involved.

To argue that investigation equals persecution is to misunderstand the rule of law. Institutions investigate transactions, money flows, representations to investors, and failures of governance — not personal piety or academic prestige.

Why iRPS Is Not Immune From Abuse

At the centre of this controversy lies the Islamic Redeemable Preference Shares (iRPS) structure. In principle, iRPS is a legitimate Shariah-compliant instrument. In practice, however, it has well-documented vulnerabilities.

iRPS occupies a grey zone between equity and debt. It is complex, illiquid, and often poorly understood by ordinary investors. When marketed aggressively — particularly with implied capital protection, “expected returns,” or moral assurance drawn from Shariah branding — it becomes highly susceptible to misrepresentation and abuse.

This concern is not theoretical. In recent years, warnings, complaints, and enforcement actions involving iRPS-type instruments have surfaced in Malaysia. The recurring patterns are striking:

• Investors misunderstanding risk and redemption terms
• Funds allegedly diverted from stated purposes
• Over-reliance on reputation rather than proper disclosure
• The involvement of intermediaries and partners whose incentives and roles are unclear

These are precisely the conditions that fall within MACC’s investigative mandate when large sums are involved and when allegations of cheating, misrepresentation, or abuse of trust arise.

The MACC Act Targets Conduct, Not Titles

Some defenders argue that MACC is overreaching, or that this matter should be treated purely as a civil or commercial dispute. This ignores the scope of the MACC Act. Where there is alleged deception, misleading inducement, or misuse of entrusted funds, MACC is empowered — indeed required — to investigate.

The fact that an investment carries an Islamic or Shariah-compliant label does not place it beyond scrutiny. 

On the contrary, the ethical premium attached to Islamic finance raises the standard of accountability. If investors were persuaded based on trust in religious authority or moral branding, any abuse of that trust is more serious, not less.

Reputation Does Not Neutralise Weak Partnerships

Another issue often overlooked by defenders is the role of partners, associates, and intermediaries. Even assuming personal integrity, governance failures, reckless delegation, or association with questionable partners can still result in criminal exposure.

In financial law, “I did not personally cheat” is not always a sufficient defence if:

• One exercised control or influence
• One benefited from the structure
• One failed in fiduciary oversight
• One allowed one’s reputation to legitimise questionable practices

Several iRPS-related schemes have already attracted regulatory warnings. That context matters. It weakens the claim that this investigation is arbitrary or politically motivated.

Final Caution to His Defenders

Defending due process means allowing investigations to proceed without intimidation, myth-making, or personality cults. Good character and scholarship are virtues — not legal shields. They do not negate the possibility of wrongdoing, nor do they invalidate the jurisdiction of MACC.

If Daud Bakar has acted properly, the investigation will clear him. That is how the system is meant to function. 

But dismissing scrutiny as victimisation simply because of who he is — rather than engaging with what is alleged — does a disservice to investors, to Islamic finance, and to the rule of law itself. 

So get a good lawyer.

In cases involving hundreds of millions of ringgit and public trust, no reputation is too distinguished for scrutiny, and no investigation should be treated as an insult.