Malaysia's police chief denies central bank governor being investigated over 1MDB

Malaysia's Central Bank Governor Zeti Akhtar Aziz.
Malaysia's Central Bank Governor Zeti Akhtar Aziz. PHOTO: REUTERS

KUALA LUMPUR (REUTERS, THE STAR/ASIA NEWS NETWORK) - Malaysia's police chief Tan Sri Khalid Abu Bakar has denied that the country's central bank governor was being investigated by police over the 1Malaysia Development Bhd (1MDB) controversy.

"Not by us," Khalid told reporters at a press conference when asked whether Bank Negara Malaysia (BNM) governor Tan Sri Dr Zeti Akhtar Aziz was being probed by police over the matter.

Earlier, Bank Negara Malaysia (BNM) denied rumours circulating in local media and financial markets that Zeti had resigned.

Rumours have circulated that Zeti has been under pressure to resign from her post amid investigations into 1MDB, a fund under the purview of the finance ministry.

When asked to comment on the rumour, a central bank spokeswoman said: "This is not true."

When contacted by The Star, a BNM spokesman also denied that Zeti, 67, had suffered a heart attack.

"She is fine and came to work as usual," added the spokesman.


A task force comprising of the central bank, the attorney-general's office, the police department and the anti-corruption commission are investigating allegations of graft and financial mismanagement in 1MDB.

The fund's advisory board is chaired by prime minister Najib Razak and has debts of over US$11 billion (S$15 billion).

On Tuesday, the government announced that attorney-general Gani Patail was replaced due to poor health. On the same day, Najib sacked his deputy after he had called on Najib publicly to explain the situation around 1MDB.

A Wall Street Journal report earlier this month said that investigators in the 1MDB probe had traced US$700 million in funds deposited into bank accounts belonging to Najib.

Reuters has not verified the report.

Authorities have said that investigations are expected to completed by the end of the year.

A PhD holder in monetary and international economics from the University of Pennsylvania's Wharton School, Zeti was credited by financial experts worldwide for managing the Malaysian economy during two financial crisis in 1998 and 2008.

Having helmed Bank Negara Malaysia (BNM) for the past 15 years, Zeti has pushed for the diversification of the country's economy - reducing dependency on commodities, branching out into the manufacturing industry and raising domestic consumption.

Economists have lauded Zeti for Malaysia's solid economic fundamentals, despite the ringgit's recent decline over uncertainties in market sentiment.

Malaysia's ringgit has weakened drastically since the slide in commodities prices in September 2014. It is the worst performing emerging Asia currency this year but has largely stayed flat the past three days. It closed at 3.8150 against the US dollar on Thursday.

Traders have said that BNM intervened to support the ringgit earlier this month, before it was allowed to slide below levels in 1998 when a dollar peg was introduced. The ringgit is near a 17-year low this week.

Malaysia's benchmark stock index has dropped 0.99 per cent so far this week, outperforming the MSCI AC Asia ex Japan Index's 1.2 per cent decline.