The 1MDB saga

Bank Negara 'holds key to probe'

Prime Minister Najib Razak's personal accounts in AmBank, which allegedly received massive funds from state investor 1MDB, have been closed. The Star newspaper said that central Bank Negara would have known of such huge transactions.
Prime Minister Najib Razak's personal accounts in AmBank, which allegedly received massive funds from state investor 1MDB, have been closed. The Star newspaper said that central Bank Negara would have known of such huge transactions.PHOTO: SIN CHEW DAILY

Bank has system that detects all foreign currency flows, says paper

PETALING JAYA • It was "highly unlikely" the Malaysian central bank did not detect the inflow of huge sums of money into Malaysian accounts from abroad, The Star newspaper said in an editorial yesterday.

Malaysia's biggest English-language newspaper said Bank Negara Malaysia is key in finding the answers in the multi-agency investigations into the alleged US$700 million (S$946 million) that was deposited into the bank accounts of Prime Minister Najib Razak.

The unprecedented high-level probe into the now-closed accounts of the Prime Minister came about after the Wall Street Journal (WSJ) newspaper reported two weeks ago that nearly US$700 million flowed into Datuk Seri Najib's accounts at AmBank, Malaysia's fifth largest lender. The funds are suspected to have originated from state investor 1Malaysia Development Bhd (1MDB).

The inflows included two payments, according to the WSJ, totalling US$681 million from Wells Fargo Bank in the United States in 2013.

The Star said Bank Negara has the Ringgit Operations Monitoring System (ROMS) that detects all incoming and outgoing foreign currencies.

URGENT TASK

The faster the task force completes its probe and comes up with the findings, the earlier the uncertainties will end and the faster the ringgit will find its real level.

THE EDITORIAL IN THE STAR

"Under ROMS, all foreign transactions of US$1 million and above are captured. Every day, the foreign exchange dealers from all financial institutions update their transactions at 5pm," the paper said.

The updates contain particulars such as the sender of the foreign currency, the foreign bank, the counter party in Malaysia, the recipient and the reasons for the movement of the funds, the paper said.

"ROMS is something that is under the purview of Bank Negara. Surely, when a sum of US$681mil comes into the country in two transactions over two days in March 2013, the central bank would have known about it at that point in time."

If the central bank was indeed alerted, "it should not be too difficult for the high-level task force to determine the flow of funds from Wells Fargo Bank, where it went to and who the recipients were".

The editorial, in effect, asked what some Malaysians, including Umno leaders, have been asking since the scandal broke: Why has Bank Negara and its respected governor, Tan Sri Zeti Akhtar Aziz, not come out to confirm or deny the huge fund inflow.

Others have also asked AmBank to stand up to say there no such money transfers, though bankers have said that Ambank is prohibited from doing so under Malaysia's banking secrecy laws.

Umno division chief for Cheras in Kuala Lumpur, Datuk Seri Syed Ali Al-habshee, said recently that Madam Zeti should stand up to clear Mr Najib's name.

"This is the time for Bank Negara's Governor to step up and clear the Prime Minister of any wrongdoing as he is being accused of manipulating his power and position to further his political and financial interests," he said.

The Star in the editorial concluded: "The faster the task force completes its probe and comes up with the findings, the earlier the uncertainties will end and the faster the ringgit will find its real level.

"The key to the US$700 million funds flow lies with Bank Negara."

A version of this article appeared in the print edition of The Sunday Times on July 12, 2015, with the headline 'Bank Negara 'holds key to probe''. Print Edition | Subscribe