Governor resigns? BNM stays mum

By DASHVEENJIT KAUR / Pic By MUHD AMIN NAHARUL

BANK Negara Malaysia (BNM) has officially declined to comment on recent rumours about the departure of Tan Sri Muhammad Ibrahim (picture) as the central bank’s governor.

BNM officials who were contacted, however, dispelled the rumours surrounding Muhammad’s purported resignation, barely two years after his appointment.

The move was believed to be a result of the questions raised by newly appointed Finance Minister Lim Guan Eng on the central bank’s purchase of a 27.27ha land from the Ministry of Finance under the previous administration for RM2.07 billion.

Lim believed that BNM had overpaid for the land it had bought from the ministry, upon which the proceed was subsequently used to service 1Malaysia Development Bhd’s (1MDB) debt obligations.

The move had raised questions about the use of state assets to support a fund that is mired in fraud.

Lim also confirmed that the money raised from two state entities were used to service 1MDB’s debt obligations to Abu Dhabi’s International Petroleum Investment Co (IPIC) last year.

Lim said the previous administration had used the RM1.199 billion shares redemption by Khazanah Nasional Bhd and the RM2.07 billion land sale to BNM to pay the RM5.05 billion settlement agreement made with IPIC.

The revelation contradicted 1MDB’s claim that it raised the money from an “ongoing rationalisation programme” and the selling of assets like power plants and land.

Lim had said that Khazanah and BNM will be queried about their involvement in the 1MDB bailout.

A report by Bloomberg stated that Muhammad had “offered to resign”, according to people “familiar with the matter, who declined to be identified because the discussions are confidential”.

Reuters reported that a source close to the Prime Minister’s (PM) Office confirmed plans to announce a decision today.

The source said Muhammad offered his resignation to PM Tun Dr Mahathir Mohamad yesterday morning. It was not clear if the resignation was accepted.

Reuters also reported two sources as saying that former deputy BNM governor Datuk Nor Shamsiah Mohd Yunus is among the candidates being considered to succeed Muhammad, if he resigns.

Another former deputy governor, Dr Sukudhew (Sukhdave) Singh, is also being considered, the source added.

The probe on BNM began a month after Pakatan Harapan’s victory in the May election.

BNM had bought the piece of land in Kuala Lumpur in January 2018 from the previous government for RM2 billion.

The land was supposed to be used primarily for the relocation of its Global Islamic Finance University and the International Shariah Research Academy for Islamic Finance.

The central bank said the completion of this transaction was the culmination of several months of discussions with the government. The governor was quoted as saying that the purchase was transacted at a fair value and complied with all governance requirements and relevant laws.

Muhammad was appointed as the eighth governor on May 1, 2016, for a five-year term, replacing Tan Sri Dr Zeti Akhtar Aziz who led BNM for 16 years.