CIMB clears chairman Nazir Razak of wrongdoing over Malaysia political funds

CIMB Group Holdings chairman Nazir Razak will resume his post at CIMB Group and as a director of CIMB Bank from Thursday (May 19).
CIMB Group Holdings chairman Nazir Razak will resume his post at CIMB Group and as a director of CIMB Bank from Thursday (May 19). PHOTO: REUTERS

KUALA LUMPUR (Bloomberg) - CIMB Group Holdings has cleared chairman Nazir Razak of misusing his position or the bank's resources when he helped his brother - Malaysia's Prime Minister Najib Razak - distribute funds to politicians before elections three years ago.

Mr Nazir will resume his post at CIMB Group and as a director of CIMB Bank from Thursday (May 19) after taking a month-long leave of absence, according to a stock exchange filing. The boards of the two companies appointed Ernst & Young to conduct an audit into Mr Nazir's activities and sought independent legal advice, they said.

The Wall Street Journal reported in March that Mr Nazir received about US$7 million from his brother's accounts ahead of elections in 2013, and passed the money to politicians in the ruling party.

Mr Nazir told the paper the money that entered his account was distributed in accordance with instructions from party leaders, and he believed it came from donations he helped solicit from Malaysian companies and individuals.

The audit found Mr Nazir "did not misuse his position as the Group Chief Executive at that time nor was there any inappropriate use of the bank's resources", CIMB said in the statement. He was group chief executive of the lender from November 2006 to August 2014, according to its website.

"However, the detailed examinations conducted during the review identified some process shortcomings, and the boards have instructed the management to put in place plans for immediate improvements as well as strengthened internal rules and processes to avoid re-occurrences moving forward."

Datuk Seri Najib is facing his biggest political crisis since coming to power seven years ago amid questions over US$681 million that appeared in his accounts before the 2013 election, which the ruling coalition, in power since 1957, won with its slimmest margin yet.

Attorney-General Mohamed Apandi Ali said the money was a personal donation from the Saudi royal family, and that Mr Najib later returned US$620 million.