A vocal critic of Malaysian Prime Minister Najib Razak was charged with corruption on Thursday in a further blow to the divided opposition, which alleged that the case was politically motivated.
Lim Guan Eng, who has repeatedly demanded that Najib explain a massive financial scandal that engulfed his administration last year, appeared in the High Court in the northern Penang state.
"I am alright," a smiling Lim told reporters as he arrived at the court. He pleaded not guilty and was freed on bail.
He is due to return to court on September 22 when trial dates are expected to be fixed and faces up to 20 years in jail if convicted.
Lim, 55, who has been chief minister of Penang state since 2008 and has led the opposition Democratic Action Party (DAP) since 2004, is accused of two counts of abuse of office.
The Malaysian Anti-Corruption Commission (MACC), which arrested Lim on Wednesday, said one charge relates to the improper change of use of public land to allow development.
The other is tied to the purchase of a house by Lim, allegedly below market price.
Under his leadership, Lim launched a campaign to halt official corruption, and has, by most accounts, injected new vigour into Malaysia's second-richest state.
Malaysia's attorney general, Mohamed Apandi Ali, who exonerated Najib over the scandal linked to state investment fund 1Malaysia Development Berhad (1MDB), is leading the prosecution.
The charges come as Najib tightens his grip on power after being battered by the scandal for the past year.
An angry opposition alleged that Najib was behind the charges against Lim, accusing the premier of mounting a political offensive and planning to call snap elections next year -- one year ahead of schedule.
Najib faces allegations that billions of dollars were plundered from a state-owned investment fund he founded.
The accusations, which emerged last year, include the revelation that Najib received at least $681 million in deposits to his personal bank accounts in 2013.
Najib and 1MDB deny any wrongdoing.
In January, Apandi, the attorney general, closed a graft investigation, clearing Najib of wrongdoing and saying no criminal offence had been committed.
Malaysia's opposition has been in disarray since the jailing of former opposition leader Anwar Ibrahim for sodomy last year.
The three-party Pakatan Rakyat alliance, which was already weak before Anwar went to jail, has since effectively cased to function.
While one of the grouping's three parties, the mostly ethnic-Chinese DAP party, last year declared the alliance finished, the Parti Islam se-Malaysia insists this is not the case, even though it has severed direct ties with its former partner.
The third member of the alliance, the People's Justice Party (Keadilan), has been caught in the middle, trying to manage ties with the two other parties.