New Bank Negara head in the works

PUTRAJAYA: A new Bank Negara governor and a special committee to probe issues on finances, governance and procurement are next on Tun Dr Mahathir Mohamad’s list.

The Prime Minister said the name of the new central bank head would be announced after he or she had received the consent of the Yang di-Pertuan Agong.

Confirming that Tan Sri Muham­mad Ibrahim had quit as governor, Dr Mahathir said: “The governor of Bank Negara has submitted his resignation. He did not give any concrete reason, but expressed his desire to resign.

“For now, we have not decided on his successor because we need to have the consent of the Agong.”

Asked if Muhammad’s departure had anything to do with Bank Negara’s purchase of land from the previous administration, the Prime Minister told reporters after chairing the Cabinet meeting yesterday that it was not mentioned.

Finance Minister Lim Guan Eng was reported to have said that the previous government had used money raised from a land sale to the central bank – valued at about US$520mil (RM2bil) – to pay off some of 1Malaysia Development Bhd’s (1MDB) debts.

Bank Negara responded by saying the purchase was transacted at fair value and complied with all government requirements and relevant laws.

Muhammad was picked to lead the central bank for a five-year term in May 2016 when Tan Sri Dr Zeti Akhtar Aziz stepped down after 16 years at the helm.

He rose through the ranks since joining the central bank in 1984.

On the Treasury’s “red file” involving Suria Strategic Energy Resources Sdn Bhd (SSER), Dr Mahathir said Lim would lead a delegation, which would include Malaysian Anti-Corruption Commis­sion officials, to China to discuss it with the parties involved, adding that the project would be reviewed.

On whether it raised suspicions that funds from China were used to pay 1MDB debts, Dr Mahathir said: “We will investigate this, but the idea that paying according to time milestone without regard to the progress of the work is wrong.

“This decision affects us. It is not good for the country. This is what the previous government did and we don’t want to do it.

“That is why a delegation will be sent to China to negotiate and discuss with the parties involved,” he added.

An agreement with a company from China to construct two gas pipelines worth RM9.4bil is now a matter of investigation because of discrepancies over the schedule of payments and work done.

Details revealed that SSER, a company backed by the Finance Ministry, had approved payments amounting to 87.7% of the project sum to the China Petroleum Pipeline Bureau.

This raised a red flag as work done averaged only 13%, outstripping the drawdown of almost 88%.

On the East Coast Rail Link, Dr Mahathir said it was found that the contract included payments according to specified time, and that work done was much less than the payments made.

He reiterated that the Govern­ment wanted to negotiate the project so that it need not fork out a lot of money for it to proceed.

He added that to further reduce spending, the allowances of top senior civil servants would be cut and financial aid to those in the low-income bracket would be reviewed, while certain agencies and training institutes would be closed down.

Senior public officers in the Jusa A category and above will have their entertainment allowance – currently between RM3,000 and RM5,000 – cut by 10% from July 1.