PETALING JAYA: Bank Negara governor Tan Sri Muhammad Ibrahim resigned after questions were raised following the purchase of land from the Government for RM2bil that ended up being used to pay 1MDB’s debts.
In an open letter to staff of the central bank explaining his offer to resign, which was accepted by the Government, Muhammad said he was prepared to relinquish his post if he no longer has 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 a letter that has gone viral, that said the image and reputation of the central bank were paramount.
Muhammad’s tenure as governor came to an end in the wake of questions over the valuation of a land deal that saw the bank earlier in the year pay the Government RM2bil for 55.79 acres adjacent to the central bank.
There were questions asked over the purchase of the land but the key question of why the money was paid before the central bank received the title was essential, and could not be answered.
It was revealed after the Barisan Nasional government lost power that the money the Finance Ministry received from Bank Negara went towards paying 1MDB’s debt.
“We are judged by the decisions we make, like for example the recent purchase of Lot 41, acquired at RM850 per sq ft, which has attracted wide public interest,” Muhammad said in the letter.
Bank Negara’s purchase price for the land was questioned in an article where five valuers questioned the price paid for Lot 41. In the article by StarBiz, five valuers felt the purchase price was too high.
The valuer of the land did not publicly divulge the price of the land in its valuation report.
Muhammad said it was not true that Bank Negara would be party to any such activities that would betray the public trust.
“We abhor any semblance of corruption and abuse of power,” he said.
“Sceptical as many may be, the bank did not know nor did we have any control over the proceeds of the land purchase that would be used to settle 1MDB’s obligations. It is simply unthinkable for us 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,” he explained.
Muhammad said the 1MDB scandal has cost the country dearly and as Malaysian, he was 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 said.
“My priority now is for the bank to move forward and continue to focus on delivering its mandates to serve the Malaysian people.”
In explaining the purchase of the land, or Lot 41, he said it was not the first time Bank Negara had done such a transaction.
“As many of you would know, we have over the years, acquired several pieces of land throughout the country to enable the discharge of our mandates. Our own headquarters presently was built on three separate land acquisitions made in the 1950s and 1980s.
“The Bukit Perdana land, acquired in 2013 at the 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 are being done, are also the nearest examples,” he said.
He said the decision to buy the land was to create greater synergies between its numerous affiliated institutions and to 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. We have a vision for a financial education hub that will also host among others, a global Islamic finance university, a syariah academy and research centre, a financial services library, innovation labs, a cybersecurity operations centre and an integrated security command centre,” he said.
He said 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.
Having served for more than 34 years, Muhammad said he always strived 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. It is also a privilege, as it entails working with possibly the best talents Malaysia has to offer. Malaysia is at a critical juncture in our 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,” he said.
Did you find this article insightful?