PRESS DIGEST - MALAYSIA - Feb 3

Following are the main stories in Malaysian newspapers. Reuters has not verified these stories and does not vouch for their accuracy.

THE STAR (www.thestar.com.my)

* Malaysian Zulkifli Abdul Hir, one of the world's most wanted men with a 15 million ringgit bounty on his head, has been killed in a pre-dawn air attack in southern Philippines.

* Malaysia is drawing up an action plan, which will likely include reforms in its crude palm oil export duty policy and a new fund estimated at over 1 billion ringgit ($331.29 million), to assist local downstream players badly affected by Indonesia's palm oil export duty structure, sources said.

NEW STRAITS TIMES (www.nst.com.my)

* The media-friendly Menteri Besar of Kedah, Azizan Abdul Razak has been instructed by his party, Parti Islam se-Malaysia (PAS), to stop talking to the press over the suspension of students at a state-owned college.

* The people of Kelantan should ponder their future and decide whether they want Parti Islam se-Malaysia (PAS) to continue governing the state, Deputy Prime Minister Muhyiddin Yassin said.

BUSINESS TIMES (www.btimes.com.my)

* A former Proton chief executive officer (CEO) Tengku Mahaleel Tengku Ariff is poised to make a shock return to Proton Holdings Bhd.

* The offer price to take Tebrau Teguh Bhd private appears low given that the property developer offers a substantial earnings upside, analysts said.

THE SUN (www.thesundaily.my/)

* AirAsia Bhd group chief executive officer (CEO) Tony Fernandes said neither he nor Tune Air Sdn Bhd have an interest to take up the 10 percent placement shares in Malaysia Airports Holdings Bhd.

THE EDGE FINANCIAL DAILY (www.theedgemalaysia.com)

* Muhibbah Engineering Bhd and CIMB Group Holdings Bhd could end up as shareholders in the beleaguered Asia Petroleum Hub Sdn Bhd through a debt-to-equity swap, sources said.

* Malaysian brokerages may have stumbled into a legal grey area when it comes to returning client funds in relation to MF Global Singapore Pte Ltd (MFGS), the Singapore arm of failed global derivatives broker MF Global.

THE MALAYSIAN RESERVE (www.themalaysianreserve.com.my)

* Lynas Corp Ltd, which has been granted a temporary operating licence by Malaysia's Atomic Energy Licensing Board (AELB) - valid for two years - to run a pilot plant, is "confident" of it landing the full operating licence before the two-year term is up, Lynas Malaysia managing director Mashal Ahmad said.

($1 = 3.0185 Malaysian ringgits)