Former Bank Negara deputy, frontrunner for governor job: Sources

KUALA LUMPUR: A former Bank Negara deputy governor who was part of an investigating team into the beleaguered state fund 1Malaysia Development Berhad (1MDB) is the frontrunner to be picked as the next governor of the bank, people familiar with the matter said.

Datuk Nor Shamsiah Mohd Yunus, is likely to take over from Tan Sri Muhammad Ibrahim who resigned last week, two people told Reuters on Monday, declining to be identified as the talks were private.

Last week, Reuters reported that Nor Shamsiah was on a shortlist of candidates for the job, vacated by Muhammad following a land deal that Prime Minister Tun Dr Mahathir Mohamad's administration said was used to pay off 1MDB debts. Sukhdave Singh, another former deputy governor, had also been on the short list, sources said.

The prime minister's office said in a statement on Monday that a candidate has already been identified, but could not reveal the name as it has yet to be officially presented to the King for his consent.

If selected, Nor Shamsiah would be the second female to head the central bank after Tan Sri Zeti Akhtar Aziz, who was the second-longest serving governor having held the post for 16 years from 2000 to 2016.

The central bank declined to comment.

Mahathir said last week he had accepted the resignation of Muhammad as the governor of Bank Negara, as the new administration purges top officials seen as close to the previous government of Najib Razak.

Muhammad's exit is seen as a fallout from the 1MDB scandal after the finance ministry said proceeds from a central bank land transaction with the Najib government were used to clear some of the fund's dues.

About US$500 million (RM1.9 billion) raised from the land sale by the government to the central bank was used to pay 1MDB's liabilities last year, the finance ministry said last month.

The central bank had defended the deal, saying it had initiated the purchase of the land and that the purchase was conducted as an arm's-length transaction.

Muhammad said he was prepared to relinquish his post if he no longer had the "strong trust and support of the public."

Nor Shamsiah, who joined Bank Negara in 1987, left the central bank in November 2016 when her term ended, just months after Muhammad's appointment. She had assisted in the 1MDB investigations when Zeti was the governor. Reuters