Bank Negara will take “administrative action” against 1MDB for failing to support its reasons for not moving RM7.76 Billion back to Malaysia

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Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz speaking at a press conference in Kuala Lumpur, March 23, 2016. — Picture by Yusof Mat Isa

BNM to take ‘administrative action’ against 1MDB over silence on RM7.8b overseas fund

MalayMailOnline

KUALA LUMPUR, March 23 — The country’s central bank will take “administrative action” against 1Malaysia Development Berhad (1MDB) for failing to support its reasons for not moving US$1.83 billion (RM7.76 billion) from Cayman Islands back to Malaysia, Tan Sri Zeti Akhtar Aziz said today.

Bank Negara Malaysia (BNM) Governor Zeti said 1MDB has missed a deadline to produce documents to back up its purported need to keep the funds overseas to repay the state-owned firm’s foreign debts.

“At this stage we have not received documentary evidence and within a certain timeline that has been stipulated to them, as we assess that they have not fully complied with the bank’s direction, the bank is pursuing appropriate administrative enforcement action as allowed by laws under which the bank operates and the bank has commenced the due process under the law,” she told reporters here.

Zeti said the central bank’s action on 1MDB is purely administrative and could possibly result in penalties or compounds, stressing that it is different from the criminal action that the Attorney-General had decided not to pursue.

She said the bank will go through the due process and submit its recommendation for administrative action to the AG, whose decision will be final.

Last year, BNM ordered 1MDB to repatriate funds amounting to US$1.83 billion (RM7.76 billion), following the central bank’s revocation of three permits to the state fund under the Exchange Control Act 1953 (ECA) for investments abroad.

1MDB had in return indicated that it was unable to repatriate the money as demanded as the funds had either been spent or earmarked for debt transfer.

Last November 13, Zeti said BNM was seeking additional information from 1MDB to validate the firm’s claim.

She also said that it is incumbent on companies to provide updates on their overseas investments at BNM’s request, especially when dealing with large amounts that exceed RM100 million.

Thursday, 24 March 2016

‘I will resolve 1MDB issue’

BY CECILIA KOKTHE STAR

KUALA LUMPUR: Bank Negara’s outgoing governor Tan Sri Dr Zeti Akhtar Aziz has promised to use her remaining 38 days in office to resolve the 1Malaysia Development Bhd (1MDB) issue before handing over the reins to her successor.

“I want closure on the 1MDB case, as I want the new governor to start with a clean slate ... and not have to deal with the matter that happened during my time,” Zeti said.

The central bank has commenced administrative enforcement actions against 1MDB for failure to submit documentary evidence pertaining to the state fund’s inability to re­patriate the US$1.83bil (RM7.16bil) it had used abroad.

In relation to the central bank’s action against 1MDB, Dr Zeti said the Federal Government-owned fund had not fully complied with the central bank’s directive on repatriating the funds.

“So we are pursuing appropriate administrative enforcement action as allowed to us by the laws under which Bank Negara operates,” Dr Zeti told reporters after her last presentation of Bank Negara’s annual report here yesterday.

1MDB, in an immediate response, reiterated that it had fully cooperated with the central bank in the past 12 months.

“We highlight that 1MDB has fully cooperated to the extent possible with Bank Negara’s investigations, including providing documentary evidence where available.”

Bank Negara had, in August 2015, revoked three permissions granted to 1MDB under the Exchange Control Act 1953 (ECA) for investments abroad totalling US$1.83bil (RM7.3bil) and issued a directive under the Financial Services Act 2013 to 1MDB to repatriate the sum to Malaysia.

The central bank also recommended criminal action against 1MDB.

But in September last year, the Attorney-General (A-G) cleared 1MDB of any wrongdoing, and said no further action should be taken against the debt-ridden fund.

Zeti conceded that the proposed administrative enforcement actions, which could result in either a penalty or compound against 1MDB, would still require the A-G’s endorsement.

Zeti, who officially retires at the end of April after 35 years with the central bank, also outlined the quali­ties of her successor.

She said the next central bank chief would need to command the respect of the people and the markets besides having to manage mone­tary and financial stability at a volatile time for the global economy.

“Not anybody can be appointed to the position,” she said, adding that candidates must have extensive knowledge, especially in the current volatile economic environment.

Several names have emerged as possible successors, with Bank Negara’s most senior deputy governor Datuk Muhammad Ibrahim, a career central banker, reckoned as the internal candidate of choice.

Besides him, the names of three others have been speculated as possible successors – the Minister in charge of economic planning in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar, Malaysian ambassador to the United States Datuk Awang Adek Hussin, and the secretary-general of the Treasury at the Finance Ministry Tan Sri Mohd Irwan Serigar Abdullah.