CIMB Group chairman Nazir Razak has taken leave of absence while the bank reviews his role in disbursing US$7 million (S$9.5 million) in political funds that his brother, Prime Minister Najib Razak, had asked him to distribute ahead of the 2013 elections.
"My brother asked for some help and I agreed after assessing that it does not involve anything illegal or misusing of my position at CIMB or any inappropriate use of CIMB resources," Datuk Seri Nazir said at a press conference yesterday.
"I feel that unless I'm completely absent from the company during this period, this institution would not be practising the highest standards of corporate governance."
The Straits Times learnt that Mr Nazir had wanted to resign from his position at CIMB, Malaysia's second-largest bank by assets, but the board of directors rejected the move. A spokesman for the bank, which held its annual general meeting yesterday, denied any talk of Mr Nazir resigning.
While institutional investors were unhappy with Mr Nazir's role in the fund distribution, shareholders voted he remain as chairman.
The Wall Street Journal (WSJ) reported last month that Datuk Seri Najib had transferred money from his bank accounts to various parties, including US$7 million to Mr Nazir that was distributed to Umno politicians.
Mr Nazir later admitted to the newspaper that he had helped his brother distribute the funds - a move that surprised many in Malaysia. Since becoming CIMB chairman in 2014, Mr Nazir has been critical of state fund 1Malaysia Development Berhad (1MDB) and his brother's administration, often airing his views on Instagram.
A special board meeting was held on April 5 to review the WSJ article and the board engaged Ernst & Young as an independent external auditor to help review how the bank distributes funds, said CIMB chief executive Tengku Zafrul Tengku Abdul Aziz.
Mr Nazir said given the present controversies surrounding 1MDB, he regretted his actions. He denied being asked more than once by Mr Najib for such a favour. "There was no other time when my brother asked for this kind of assistance."
Since assuming the leadership in 2009, Mr Najib has led only one general election, in which the ruling Barisan Nasional coalition lost the popular vote for the first time in its 58 years of power.
Malaysia's next general election is due by mid-2018. Sarawak state goes to the polls on May 7.
• Additional reporting by Shannon Teoh