Deputy premier Abdullah Ahmad Badawi today defended the government's controversial buy-back of Malaysia Airlines System (MAS) last year despite a police probe into alleged management irregularities.

The government re-nationalised the flag carrier in February 2001 after buying back a 29 percent stake from tycoon Tajudin Ramli at more than twice the prevailing market value, a deal widely seen as a bail-out.

The airline said Wednesday it had sought police help to investigate irregular deals in the cargo division during Tajudin's tenure as chairman from 1994 to 2001.

Abdullah said the government's decision to buy back Tajudin's stake in MAS for RM1.79 billion was based on factors at the time.

"The government's decision at that time was indeed correct in consideration of the factors that were presented at that time and when now, new matters related to MAS crop up... then action needs to be taken," he was quoted as saying by Bernama news agency.

In light of the police probe, opposition leaders have urged the government to question former finance minister Daim Zainuddin, who endorsed the deal and made a statement in parliament justifying the buy-back before resigning last June.

But Abdullah said the irregularities were "new things which need not necessarily be linked to Daim's statement in parliament".

No exceptions

Abdullah, who is also home minister in charge of police, said he did not know if police would question Daim but added that action would be taken against anyone involved in the irregularities.

"I do not know the method which the police will adopt in their investigation. I do not direct the police to call this person or that person or tell them... do it like this or like that," he said.

Abdullah stressed that action taken was based on the offence committed and not due to the person's links with any individual, referring to Tajudin's close association with Daim.

"Any action taken against any particular individual is on the basis of that particular individual's performance, whatever he has done, whatever mistakes... whatever offences he has committed, not because of his association with any particular individual," he said.

MAS, struggling under some RM10 billion in debt, embarked on a restructuring plan last year to return to the black by 2004.

Last month, it announced it would be de-listed from the stock exchange and that it would split its domestic and international operations as part of restructuring plans. (AFP)