e look at Malaysian central banker Zeti Akhtar Aziz’s words today as local and foreign media pressed her on Najib’s receipt of billions in donations, and the outcome of the 1MDB investigation.
Bank Negara Governor Zeti today gave an indication that investigations into the RM2.6 billion ‘donation’ to Prime Minister Najib Razak were not over.
“The bank has submitted its investigation papers to the attorney general with the recommendation for the appropriate enforcement action,” Bank Negara Malaysia Gov. Zeti Akhtar Aziz said during a briefing on the country’s second-quarter gross domestic product data. The report was submitted to the attorney-general this week, she said.
She also indicated the central bank’s expectations for actions to be taken against the sovereign fund 1MDB.
From our analysis — the statements made by Zeti seem to confirm that the sovereign fund has breached the country’s financial laws, but no information in this regard were given by Zeti who was pressed by reporters for concrete answers on the issue.
From our perspective, Zeti’s statements seem to indicate there is more to come in relation to the donation, which the Malaysian PM said came from a generous donor from the Middle East.
While Zeti stated the central bank has finalised its investigation on the 1MDB scandal, and has submitted its report to the Attorney General ‘earlier this week with recommendations for appropriate action’, the question is — is Bank Negara still investigating the source of the donation to Najib?
Zeti made it clear that Bank Negara had (also) shared all the information that it had in relation to any account with the relevant authorities.
“The central bank only looks at contraventions to our law and assists other agencies in looking at contraventions to their laws. This is what we can do.
“We cannot take action in areas where our laws don’t allow us to do so,” she said.
“The information that BNM had with regards to 1MDB was provided by the local banks and our foreign counterparts,” she explained to reporters.
So what is BNM’s position on any large transaction in individual accounts?
Zeti said it was the responsibility of financial institutions to conduct due diligence if warranted.
“If there is anything suspicious, they will file a Suspicious Transactions Report (STR) and submit it to us,” she added.
Asked if any STR had been filed in respect of the RM2.6 billion donation transferred into Prime Minister Datuk Seri Najib Tun Razak’s account, Zeti said banks were supposed to conduct due diligence on transactions deemed suspicious.
She also insisted the ‘donation’ was not under the bank’s purview, but did not say whether any action will be taken by the bank against AmBank for what appears to be a breach of the central bank’s money laundering trigger system.
What she did say, however, was that the bank was investigating compliance by financial institutions to this requirement (of filing STR). She did not single out any bank here.
Whether the private accounts of the PM were among those investigated and included in the report by BNM is still unknown, but speculation could run rife in the coming days as pressure will mount on the AG for action to be taken on 1MDB.
Zeti made it clear the central bank did not have the authority to pursue any legal action against the account holders.
This could indicate that the central bank has done its part, throwing the ball now into the prosecutor’s court.
However — although Zeti said the bank was unable to publicly discuss the contents of the report, they could discuss the report with the Public Accounts Committee.
She indicated that if the Public Accounts Committee summoned the governor — she and her team would give her full cooperation.
Will the Public Accounts Committee get its act together and ask Zeti about the report it had given the AG?
