KUALA LUMPUR: Bank Negara Malaysia (BNM) governor Tan Sri Muhammad Ibrahim is expected to resign and former BNM deputy governor Datuk Nor Shamsiah Mohd Yunus is a likely replacement, according to sources.
The sources told The Edge Financial Daily that Nor Shamsiah, who left around the same time Muhammad was chosen to succeed former BNM governor Tan Sri Dr Zeti Akhtar Aziz in 2016, had been offered the job but has apparently not made a decision to accept it or otherwise.
Meanwhile, Reuters reported that exit terms are being discussed for Muhammad and an announcement could be made as early as today.
Nor Shamsiah did not stay on as BNM deputy governor when her term ended in November 2016. She had also led the central bank’s investigations into 1Malaysia Development Bhd (1MDB) before they were abruptly stopped in 2015.
After leaving the central bank, she took on the role as assistant director of the International Monetary Fund in April last year.
She had been with BNM since 1987, and was involved in the financial sector resolution initiatives during the Asian financial crisis and the preparation and implementation of the Financial Sector Masterplan for the development of the Malaysian financial system from 2001 to 2010.
A year after Nor Shamsiah left, another deputy governor Dr Sukudhew (Sukhdave) Singh relinquished his position in December 2017 after 31 years of service with the central bank, making him the second deputy governor to step down since Muhammad took over as governor.
Muhammad succeeded Zeti as BNM governor on May 1, 2016. Prior to joining BNM, he helmed Danamodal Nasional Bhd as its managing director, and the Securities Commission Malaysia as its commissioner.
When contacted by The Edge Financial Daily, a BNM spokesman declined to comment on speculation that Muhammad is leaving the central bank. “No comment at this point,” the spokesman said.
Muhammad is said to have fallen out with the new government over BNM’s purchase of a piece of land from the finance ministry (MoF) for RM2.066 billion last December. The money is now confirmed to have been used to pay interest on 1MDB’s debts.
To recap, BNM had said the purchase of the said land, contiguous to BNM’s Sasana Kijang complex, was initiated by the central bank, conducted as an arms-length transaction, and transacted at a fair value as determined by an independent private sector valuer.
However, the MoF, on May 24, confirmed news reports that the former government, led by Barisan Nasional, bailed out the troubled 1MDB through funds raised from BNM’s purchase of the said land for RM2.066 billion and redemption of Redeemable Cumulative Convertible Preference Shares (RCCPS) by Khazanah Nasional Bhd amounting to RM1.199 billion.
On Jan 8, The Edge Malaysia weekly noted it is rare for a government agency to buy land from the federal government and for the transaction to be done at market price. At RM2 billion, the price of the 2,430,212.4 sq ft parcel works out to RM823 per sq ft.
Questions were also raised as to whether BNM should be acting like a real estate developer, buying such a large tract at a huge sum and then taking its time to put it to use.
This article first appeared in The Edge Financial Daily, on June 6, 2018.
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