UPDATE 2-Malaysia tycoon, others tried to sway judges-inquiry

(Adds Bar Council comment in paragraphs 6-7)

By Soo Ai Peng

PUTRAJAYA, Malaysia, May 16 (Reuters) - A Malaysian tycoon and a former government minister were involved in a covert campaign to influence judicial appointments seven years ago, an official inquiry said on Friday, urging for criminal probes.

The inquiry's 186-page report named tycoon Vincent Tan, who controls property-to-gaming conglomerate Berjaya Group (BGRO.KL) and the then de facto law minister, Tengku Adnan Tengku Mansor, as well as a lawyer known as V.K. Lingam.

Prime Minister Abdullah Ahmad Badawi's government on Friday ordered its chief prosecutor to investigate the three, as well as a retired chief judge and former premier Mahathir Mohamad, whom the inquiry said was also "entangled" in the process.

The inquiry is seen as the boldest move yet by the government to clean up the judiciary, which has been under a cloud since 1988 over its independence and integrity. The report comes just two months after the ruling party suffered a blow at the general elections.

Once regarded as one of the more independent institutions in Malaysia, it has lost credibility since Mahathir clashed with top judges, three of whom were removed in 1988.

The Bar Council, which represents more than 12,000 lawyers in the country, called for thorough, fair and speedy investigations.

"This is crucial particularly in light of the evidence at the inquiry, which showed that similar investigations had been previously closed by the authorities without further action," it said in a statement. The inquiry, sparked by evidence of a 2001 judicial scandal that only emerged last year, did not speculate on the reason for the attempt to hold sway over judicial appointments. But it said some of the country's most serious criminal laws, including the Sedition Act and the Penal Code, could have been breached.

"We are of the view that there was, conceivably, an insidious movement by V.K. Lingam, with the covert assistance of his close friends, Vincent Tan and Tengku Adnan, to involve themselves actively in the appointment of judges...," the inquiry said.

"In the process, Tun Dr Mahathir Mohamad was also entangled," it said, without elaborating.

The inquiry said there was sufficient cause to invoke various laws, including the anti-corruption and official secrecy laws, against some of the "principal individuals" involved.

"We do not discount the possibility of other laws being contravened," it said.

ATTORNEY-GENERAL TO INVESTIGATE

Law Minister Zaid Ibrahim, tasked in cleaning up the image of the judiciary, said it was possible that criminal offences had been committed but stressed the presumption of innocence.

"The Cabinet agrees for the attorney-general's chambers to institute immediate investigations on all allegations levelled against individuals identified in the report," he told reporters.

The inquiry was formed late last year after the opposition created a storm by releasing a video-tape showing a lawyer, Kanagalingam Vellupillai, or V.K. Lingam, talking into a mobile phone, bragging of his ability to influence judicial appointments.

The lawyer had been talking to the then third-ranking judge, Ahmad Fairuz Sheikh Abdul Halim, the inquiry heard. Only Lingam was shown talking in the video, filmed secretly in Lingam's home in December 2001.

Ahmad Fairuz denied that Lingam had been speaking to him.

In the video, Lingam is heard boasting of his links to Mahathir's government and a business tycoon and of how he, Lingam, could help influence Ahmad Fairuz's own promotion.

Lingam did not concede at the inquiry that he was the man pictured in the video but testified that he had acted as a lawyer for Tan's Berjaya.

Tan also gave evidence at the inquiry and denied he had played any role in influencing the appointment of judges.

A spokeswoman for Tan said earlier on Friday, before Zaid's news conference, that he was not in a position to comment because he was travelling overseas.

An aide to Mahathir said the 82-year-old former premier was waiting to read the report before making any comment.

"We'll have to have some lead time to see if we can get a copy of the report and try to see what is inside," the aide said.

"It should be very specific on who is the individual because otherwise we'll be implicating a lot of people." (Additional reporting by Liau Y-Sing; Writing by Mark Bendeich and Jalil Hamid; Editing by Ramthan Hussain and Valerie Le)