Cabinet accepts Muhammad's offer to resign as Bank Negara Malaysia governor

June 6, 2018 | By | Reply More

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PETALING JAYA: The Cabinet today accepted Tan Sri Muhammad Ibrahim’s offer to step down as the governor of Bank Negara Malaysia (BNM), in an apparent attempt by him to distance the central bank from aspersions of wrongdoing.

A statement from BNM states that a successor has not been named, but speculation is rife that former deputy governor Datuk Nor Shamsiah Mohd Yunus, who left the bank shortly after Tan Sri Zeti Akhtar Aziz’s departure, is a favourite for the job.

Criticism over a RM2 billion deal done between BNM and the Ministry of Finance in January this year resurfaced after Finance Minister Lim Guan Eng confirmed on May 24 that proceeds from the land sale and a RM1.199 billion redemption of redeemable cumulative convertible preference shares of the remaining RM1.2 billion owed to the MoF by Khazanah Nasional Bhd, were used to make interest payments for 1Malaysia Development Bhd (1MDB) debts.

Muhammad tried to contain the issue by maintaining that the deal had been done at arm’s length and initiated by the central bank, but the matter continued to gain traction, culminating in the governor offering to resign.

In a press conference after the new government’s second Cabinet meeting, Prime Minister Tun Mahathir Mohamad said Muhammad had not provided a reason for his offer of resignation.

According to Bernama, however, Muhammad told the news agency that over the past few weeks, there had been serious questions raised whether he had fallen short of the highest level of professionalism, integrity and honour standard and put at risk public confidence in the bank.

“I am prepared to relinquish my post if I no longer have the strong trust and support of the public. I cannot in good conscience continue if it affects the bank’s image and reputation.

“We are judged by the decisions we make, like for example the recent purchase of Lot 41, acquired at RM850 per square foot, which has attracted wide public interest,” Bernama reported him as saying.

Muhammad went on to reiterate that the land purchase was not done intentionally to assist and abet the misappropriation of public funds pertaining to the corruption and scandal surrounding 1MDB, but instead followed the right manner, with proper governance and accountability, in compliance with all relevant laws.

He said the 22.5ha land was merely one of many the central bank has acquired throughout the country to enable the discharge of its mandates.

“Our own headquarters presently were built on three separate land acquisitions made in the 1950s and 1980s. The Bukit Perdana land, acquired in 2013 at a price of RM1,235 per sq ft, was also based on an independent professional valuer, upon which the ongoing construction of the Asian School of Business and the Financial Industry Training Centre is being done, are also the nearest examples,” said Muhammad, who became governor in May 2016.

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