BNM’s Muhammad resigns

Next governor to be named as soon as Yang di-Pertuan Agong gives consent

By P PREM KUMAR / Pic By TMR File

Tan Sri Muhammad Ibrahim (picture) has resigned from the highest position at Bank Negara Malaysia (BNM), about two years after he was appointed to helm the country’s most powerful financial body.

Muhammad tendered his resignation and the Cabinet deliberated on the matter at yesterday’s meeting. “We have accepted his resignation.

He did not give any reasons for his decision,” said Prime Minister (PM) Tun Dr Mahathir Mohamad after chairing the Cabinet meeting in Putrajaya yesterday.

He said the government will name the next central bank governor as soon as the name receives the consent from the Yang di-Pertuan Agong.

The PM also declined to reveal the names proposed for the central bank chief despite speculation that former BNM deputy governor Datuk Nor Shamsiah Mohd Yunus will return to helm the financial sector regulator.

BNM in a statement yesterday confirmed Muhammad had stepped down and the bank assured of a smooth transition in handing over of duties to his successor.

Muhammad also thanked the government for the honour and privilege of serving the nation and the people.

BNM’s purchase of a 22.5ha land plot for RM2 billion, where the proceeds were used to pay the debt of scandalplagued 1Malaysia Development Bhd (1MDB), is believed to be the reason behind Muhammad’s departure.

Finance Minister Lim Guan Eng had exposed that 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 1MDB’s RM5.05 billion settlement deal with International Petroleum Investment Co.

BNM had always maintained the sale was conducted as an arms-length transaction and the land’s fair value was determined by an independent private sector valuer.

“The transaction complied with all the governance requirements and relevant laws that govern the bank. The bank shall continue to be transparent on this matter,” BNM had said.

In an email to BNM’s staff yesterday, Muhammad said the recent purchase of Lot 41, acquired at RM850 per sq ft, had attracted wide public interest.

He said: “We are judged by the decisions we make. But he reiterated that the land deal was an excellent opportunity to secure an asset on fair terms that will be central to sustaining BNM’s future long-term growth.

“Coming out fresh from the experience of a Royal Commission of Inquiry on foreignexchange losses of 30 years past, the bank was careful to make sure everything is above board.

“We knew that we need to pass the test of public scrutiny in everything we do to maintain our reputation and confidence of the public,” he said in the communique.

“As a central bank, we are only as effective as the trust and confidence that the people of Malaysia and its leaders place in us.

“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,” he said in the 923-word email sighted by The Malaysian Reserve.

Nor Shamsiah’s return will not be a shock to the bank, which she joined in 1987. She was promoted to assistant governor in December 2004, alongside outgoing governor Muhammad.

She was then appointed deputy governor in 2010 following the retirement of Datuk Zamani Abdul Ghani, and later re-appointed in 2013.

After leaving BNM, she joined the International Monetary Fund.