KUALA LUMPUR: Malaysia’s central bank governor Muhammad Ibrahim has submitted his resignation, said Prime Minister Mahathir Mohamad on Wednesday (Jun 6).
It was reported on Tuesday that Malaysia was discussing the exit terms of the Bank Negara governor, who had finished less than half of the five-year term he began in May 2016.
No decision has been made yet on a successor, but two sources told Reuters on Tuesday that former deputy central bank governor Nor Shamsiah Mohd Yunus, who left the bank when her term ended in November 2016, was among candidates being considered.
"We have not decided on his successor because we need to have the approval of the Agong before we can announce," Dr Mahathir told a news conference after the weekly Cabinet meeting, adding that he plans to meet the king "as soon as possible" for further discussions on the matter.
According to Dr Mahathir, no concrete reason was given by Muhammad Ibrahim for his resignation.
Dr Mahathir also said that the new Malaysian government's first parliament sitting will be held on Jul 16.
A Harvard University graduate, Muhammad was appointed as governor in May 2016 following the retirement of long-serving governor Zeti Akhtar Aziz.
Muhammad joined the bank in 1984 and rose to become the deputy governor in 2010 before assuming the top spot.
TRUST AND SUPPORT
In a Whatsapp reply to Bernama’s query, Muhammad said that when he took office in May 2016, he vowed to execute the responsibility of the office of the Governor with the highest level of professionalism, integrity and honour.
However, over the past few weeks, there have been serious questions raised whether he had fallen short of this standard and put at risk public confidence in the bank.
“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.
“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,” he said.
Muhammad's resignation comes after Finance Minister Lim Guan Eng said last month that funds from a land sale made by the government to the central bank for about RM2 billion (US$502.51 million) were used to pay the liabilities of beleaguered state fund 1Malaysia Development Berhad (1MDB).
“This is totally untrue. Bank Negara Malaysia will never be party to any such activities that would betray the public trust in us. We abhor any semblance of corruption and abuse of power,” he stressed.
Sceptical as many may be, he said Bank Negara did not know nor did it have any control over the proceeds of the land purchase that would be used to settle 1MDB’s obligations.
He said it was simply unthinkable for the central bank to be associated with such a controversial entity mired with accusations of fraud and mismanagement.
“It is not in our nature to do such things. We even took enforcement action against them earlier.
“The 1MDB scandal has cost the country dearly and as a Malaysian myself, I am deeply angered, distressed and outraged.
“This is indeed a matter of significant public focus and I can understand why any association with the scandal, unintended or otherwise, is invariably met with a strong sense of public outrage,” he added.
Muhammad said his priority now was for the central bank to move forward and continue to focus on delivering its mandate to serve the Malaysian people.
Referring to the purchase of Lot 41, he said it was not the first time that Bank Negara had undertaken such a transaction.
He pointed out that the central bank had over the years, acquired several pieces of land throughout the country to enable the discharge of its mandate.
In fact the present headquarters, was built on three separate land acquisitions made in the 1950s and 1980s.
Another example, is the Bukit Perdana land, acquired in 2013 at the price of RM1,235 per square foot based on an independent professional valuer, upon which the ongoing construction of the Asian School of Business and the Financial Industry Training Centre are being carried out.
Muhammad said the central bank had always wanted to create greater synergies between its numerous affiliated institutions and ensure talent development for the financial sector workforce.
“With this objective in mind, we indicated our interest as early as September of 2016. We initiated the purchase of the land a year later when we knew that there was an emergent interest by the government then to sell this land.
“We believe that it was an excellent opportunity to secure an asset on fair terms that will be central to sustain our future long-term growth," he said, adding that the vision for a Financial Education Hub was that it would also host among others, a global Islamic finance university, a Shariah academy and research centre, a financial services library, innovation labs, a cybersecurity operations centre and an integrated security command centre.
“We ensured that everything was done in the right manner, with proper governance and accountability, including compliance with all relevant laws.
“Internally, we deliberated this at a number of board meetings. We even recommended to the government for the sale to be best done by way of a public tender which we would be glad to participate competitively in along with any other interests.
“We also chose to publish a press release in January 2018 to inform the public of the purchase in our effort to be transparent,” he said.
Coming out fresh from the experience of a Royal Commission of Inquiry on foreign exchange losses of thirty-years past, Bank Negara was careful in making sure everything was above board, he said.
“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 pointed out.
Muhammad said that for more than 34 years, he had always sought to serve, to do his best in the interest of the country, its values and its people.
The office of the governor is a heavy responsibility with great capacity for good and is also a privilege, as it entailed working with possibly the best talents Malaysia has to offer, he said.
For Muhammad, Malaysia is at a critical juncture in its history.
“It is important for us to stand united as an institution in rising to the occasion.
“The Malaysian people expect nothing less than our full dedication and commitment.
“This institution is bigger than any individual, and I truly believe our best days are ahead of us. Let us draw courage, lessons and strength from this,” he added.