Malaysia PM brother involved in funds dispute

  • 18/04/2016

Malaysian Prime Minister Najib Razak's brother has taken a voluntary leave of absence from his role as chairman of CIMB Group Holdings ahead of an independent inquiry into money transfers to his personal account, a company source says.

The decision follows revelations last month that Nazir Razak received US$7 million in funds in his personal account from the prime minister before the country's 2013 elections.

Nazir announced his plans on Monday (local time) to shareholders attending the annual general meeting of Malaysia's second-biggest lender by assets, said the source, who asked not to be identified as the announcement was not yet public.

CIMB has commissioned an auditor to carry out an independent review of the bank's processes, the source said, adding that Nazir felt it was right to go on leave during the investigation.

CIMB did not comment immediately, but said it would hold a news conference later in the day.

Nazir, a leading Malaysian corporate figure, had said earlier that he believed the money came from legitimate fund-raising, adding that CIMB bank staff disbursed the funds to ruling-party politicians on the instructions of party leaders.

CIMB shares were down 1.6 percent by 1420 AEST while the benchmark index was down 0.7 percent.

Nazir's decision will benefit corporate governance and transparency, said Tony Fernandes, founder of Malaysian budget airline AirAsia.

"Class act by Chairman of CIMB Nazir Razak," Fernandes said in a posting on social media website Instagram. "Voluntarily has taken leave from today to allow an independent investigation into the $7 million transfer."

Prime Minister Najib, who is president of the country's long-ruling United Malays National Organisation, has faced repeated calls to step down over corruption allegations after US$681 million was discovered in his personal bank accounts.

Najib has denied any wrongdoing, and has refused to step down, saying he did not take any money for personal gain.

A government-appointed attorney-general this year cleared Najib of any criminal offence or corruption, saying the funds were a political donation from the royal family of Saudi Arabia.

Such donations are not considered illegal in Malaysia.