Bank Negara Governor offered to resign over Land Deal with 1MDB


June 6, 2018

Bank Negara Governor offered to resign over Land Deal with 1MDB

By Elffie Chew and Anisah Shukry

https://www.bloomberg.com/news/articles/2018-06-05/malaysia-central-bank-governor-is-said-to-have-offered-to-resign

Image result for bnm governor muhammad ibrahim

 

Malaysia’s central bank Governor Muhammad Ibrahim offered to resign from his post two years into his term, according to people familiar with the matter, who declined to be identified because the discussions are confidential.

The move comes less than a month after Prime Minister Mahathir Mohamad won a surprise election victory and his newly installed Finance Minister, Lim Guan Eng, raised questions about the central bank’s purchase of land from the previous administration.

It’s unclear what the government’s response was to his resignation offer. A spokesperson for the central bank declined on Tuesday to comment on whether the governor had offered to resign. An official at the Finance Ministry also declined to comment. Muhammad didn’t respond to several calls and text messages to his mobile phone and office.

Lim said in May that the previous administration of Najib Razak had used money raised from a land sale to the central bank — valued at about $520 million — to pay off some of the debts of 1MDB, the state investment fund that’s been mired in a corruption scandal.

Bank Negara Malaysia has said the purchase was transacted at fair value and complied with all governance requirements and relevant laws.

The ringgit erased earlier gains to trade little changed at 3.9730 per dollar after the report, while the benchmark stock index pared earlier losses of as much as 0.4 percent to close steady at 1,755.14.

Ongoing Investigation

“It is still part of the ongoing investigation into the previous government’s alleged corruption,” Andy Ji, Asian currency strategist at Commonwealth Bank of Australia in Singapore, said by phone. “At this stage, it is hard to see the development would lead to a change to monetary policy stance.”

Muhammad was promoted to lead the central bank for a five-year term in May 2016 when Zeti Akhtar Aziz — who was appointed by Mahathir — stepped down after 16 years of leadership. He had risen through the ranks of the central bank since joining it in 1984 and was endorsed by Zeti when she left as a successor able to provide policy stability.

Born in 1960 and with a master’s degree from Harvard University, Muhammad has had to navigate volatile financial markets since he took the helm at Bank Negara Malaysia. He cut interest rates in a surprise move shortly after taking office and implemented curbs on some foreign-exchange trading that has drawn criticism from currency traders.

The economy has rebounded since then, with the currency among the top performers in emerging markets globally this year.

— With assistance by Pooi Koon Chong, and Y-Sing Liau

8 thoughts on “Bank Negara Governor offered to resign over Land Deal with 1MDB

  1. MO1 poisoned the careers (and perhaps even values) of many people he came into contact with, like some kind of deadly toxin.
    He deserves all the name-calling and unflattering labels coming from
    Dr M about him.

    Meanwhile, MO1 continues to make public statements and pontificate like he is some kind of retired Malaysian elder statesman !

  2. Mohammad, if left alone as a technocrat, would have performed outstandingly..Unfortunately, the job was never just another job. Zeti herself had wanted to resign after Mahathir got rid of her predecessor. She finally did to avoid 1MDB stinking her even more.

    Mohammad fortune is a case to argue, that UMNO politics was toxic even to the best of us. You cannot have politics where you throw away your best. They do not come by that often they can be wasted just like that.

    Mohammad did break, just a little, but the Aging Knights have very little time to send their messages and BNM is one message they needed to make loudest of all..

  3. Why resign if you have done nothing wrong?
    ______________
    Wayne,

    M2.0 government gave him the opportunity to save face.–Din Merican

  4. Is there any need for fair value in transactions between the Govt and the statutory body like BNM. Are there any such precedent set in previous land dealing between the Govt and BNM. The so-called arm-length dealing does not make any sense because end of the day we are dealing with peoples’ money.

  5. The Governor did the honorable thing to resign or lesson will never learnt.

    It was not unexpected from me and those who view strongly against the head of a government institution which had deviated from its objective and purpose. BMN should never had dealt with investments in land. It did, and it never learned it’s lessons from the Forex loss which rendered BMN became technically bankrupted.

    Because of its deviation BMN had lost in Forex speculation at least RM 15 b( some estimated to be Rm 31 b) of Rakyats money during Mahathir’s reign In early 1990s,

    BMN ‘s duty is to regulate and stabilise, NOT speculate, the country financial system / markets, institutions and banks, for the smooth running of financial, economic for help grow the country, advise the government on such matters as and required.

    I think his former Deputy Governor who had resigned, should be the best person to be appointed to take over his post, now felt vacant.

  6. Quote:- “The Governor did the honorable thing to resign or lesson will never learnt”

    Great, now the lesson to be learnt is that every managing director of any company can just “honorably” resign after committing CBT or other corporate crimes and retire comfortably with his millions.

    He must explain the rationale behind the billion Rinngit land deal because BNM is not in the business of dealing in landed property.

    Why the special treatment for him to “save face?”

    Once again, I ask , why resign if you have done nothing wrong?

    • Or to frame the question differently. The need to save face presupposes there is something to hide which may be exposed if he does not resign voluntarily. So, the question is – why allow him to resign? Why not investigate him?

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