Disprove negative reports or sue, banker urges Malaysian govt

KUALA LUMPUR • The government must disprove negative reports by the global media, or sue, as the unflattering coverage is causing markets to view Malaysia more negatively than it actually is, prominent banker Nazir Razak has said.

Writing on his Instagram account, the CIMB Group chairman and brother of Prime Minister Najib Razak said: "This is worrying. The market is much more negative about Malaysia than the rating agencies, taking us into 'junk' category, way below our fundamentals. Suspect it's due to so much negative coverage in WSJ, FT and NYT - all 'capital' people read at least one if not all of them. We have to change the current narrative about Malaysia with answers or legal suits; can't just ignore them."

He was commenting on data from Moody's rating agency, according to The Malay Mail Online.

Moody's said credit-default swaps traders believe Malaysia's sovereign credit rating deserves to be accorded "junk" status along with five other developing nations.

In a report by Bloomberg yesterday, it said Malaysia is ranked A3 at Moody's, though traders see it six levels lower at Ba3. South Africa, which is a Baa2, is viewed as a B1 borrower. Three Aa3 nations, including China, are perceived by the markets as deserving the lowest investment grade.

The country has been in the international spotlight over controversies involving government-owned investment firm 1Malaysia Development Berhad (1MDB), which Datuk Seri Najib oversees as Finance Minister and chairman of the firm's advisory board.

On Monday, the Wall Street Journal reported that the US Federal Bureau of Investigation has opened an investigation into entities linked to 1MDB.

On Tuesday, The New York Times reported that the US Justice Department has convened a grand jury to consider possible indictments for corruption over property purchases worth hundreds of millions in the US by individuals associated with the Malaysian prime minister.

Mr Najib is also under scrutiny over a RM2.6 billion (S$850 million) political donation from a Middle Eastern donor that went to his personal accounts. He has denied any impropriety over the donation.

A version of this article appeared in the print edition of The Straits Times on September 25, 2015, with the headline 'Disprove negative reports or sue, banker urges Malaysian govt'. Print Edition | Subscribe