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Malaysia’s central bank chief latest to fall as 1MDB probes accelerate
KUALA LUMPUR, June 7, 2018 (BSS/AFP) – Malaysia’s 1MDB scandal claimed
another scalp Wednesday with the resignation of the central bank governor
after a controversy linked to the stricken investment fund, as the new
government steps up probes into the alleged plundering of state coffers.
Allegations that billions of dollars were pillaged from the sovereign
wealth fund were a major factor in the shock election loss last month of
Najib Razak’s coalition, which had ruled Malaysia since independence from
Britain in 1957.
Najib, his family and cronies were accused of looting 1 Malaysia
Development Berhad (1MDB) and using stolen funds to buy everything from
artworks to real estate, in a sophisticated campaign of fraud and
embezzlement that stretched around the world.
As the scandal escalated, Najib lurched sharply to the right and purged
opponents in government, who were replaced with figures that critics said
were more willing to do the scandal-mired leader’s bidding.
Muhammad Ibrahim, governor of the Bank Negara Malaysia, the central bank,
was appointed in 2016 following the departure of his long-serving
predecessor, who left her post after increasingly finding herself at odds
with Najib over the graft claims.
Prime Minister Mahathir Mohamad announced Wednesday that Muhammad, a
Harvard-educated banker who had been at the central bank over three decades,
had submitted his resignation.
It came after the bank admitted to buying land from Najib’s regime in
Kuala Lumpur in late 2017 for about two billion ringgit ($500 million), with
the finance ministry saying the cash was used to service 1MDB’s debts.
The bank has insisted the land was bought at a fair price and said it had
given details about the matter to anti-corruption authorities for them to
conduct a review.
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– Heads roll –
Muhammad was the latest leading public figure to either quit or be forced
from his post after the return to power of Mahathir, 92, who had a first
stint as premier from 1981-2003 and came out of retirement to defeat Najib.
New Attorney-General Tommy Thomas — whose predecessor had cleared Najib
of wrongdoing over 1MDB, and was pushed out of the job after the old regime
lost power — started work Wednesday with a vow to pursue those allegedly
involved in the scandal.
“The government’s first and immediate priority is all matters pertaining
to 1MDB,” said Thomas in a statement.
He said “alleged wrongdoers” would be taken to court and insisted: “No one
will be spared. There will be no cover-up”.
The finance ministry meanwhile sounded the alarm about a “highly
suspicious” 9.4-billion ringgit ($2.4 billion) China-backed deal to build
pipelines signed under Najib’s government, saying it was likely linked to
1MDB.
The deal was one of a series of big-ticket, Beijing-backed projects signed
during Najib’s leadership, fuelling suspicions China was helping the scandal-
mired leader pay off debts racked up by the stricken fund.
The ministry said that 8.25 billion ringgit had already been drawn down by
the Chinese company building the pipelines — but only 13 percent of the work
completed.
The deal was largely funded by a Chinese state-owned bank. Najib insisted
all laws had been complied with in the signing of the project.
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