News: Central Bank Governor Quits Due to RM2bil Land Purchase

Jun 12, 2018


Tan Sri Muhammad Ibrahim has resigned from his position as the Governor of Bank Negara Malaysia (BNM) due to mounting criticism that the central bank agreed to purchase overvalued land from the previous government, with the payment used to repay some of the debts of 1Malaysia Development Bhd (1MDB), reported The Star.

He has decided to quit to save the central bank’s name, said Muhammad in an open letter to BNM’s employees. His resignation has also been accepted by the new Pakatan Harapan government.

“I cannot in good conscience (remain as BNM Governor) if it affects the bank’s image and reputation.”

Before the election, the previous administration led by former PM Najib Razak, had kept secret that the RM2.066 billion paid by the central bank for a 55.79-acre land (Lot 41) adjacent to its headquarter was diverted to repay 1MDB’s loans. But this was recently discovered by the new government.

“We are judged by the decisions we make, like for example the recent purchase of Lot 41, acquired at RM850 psf, which has attracted wide public interest,” noted Muhammad.

In May, five real estate valuers revealed that the price was too high, with one of them saying that the price should be lower than RM775 psf.

Furthermore, Muhammad revealed that BNM had no idea that their payment will be used by the Najib administration to pay the debts of 1MDB, which is embroiled in a multibillion-dollar corruption scandal.

“Sceptical as many may be, the bank did not know nor did we have any control over the proceeds of the land purchase that would be used to settle 1MDB’s obligations.”

“It is simply unthinkable for us to be associated with such a controversial entity mired with accusations of fraud and mismanagement. It is not in our nature to do such things. We even took enforcement action against them earlier,” he added.

Image sourced from The Star Online

This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email

Home buyers, sellers or property renters looking for Malaysian Properties, may like to visit the New Launches or Project Reviews page. Also, read up on how to improve your chances of obtaining a housing loan here

agent image
agency logo
Shaiful Safar
Real Estate Negotiator
REN: 17520
True Vest Property Consultants Sdn. Bhd.
(+60) 11-32302211