KL to relook plan for trading link with S'pore

CENTRAL BANK GOVERNOR MUHAMMAD IBRAHIM
CENTRAL BANK GOVERNOR MUHAMMAD IBRAHIM

Mahathir also accepts the resignation of Malaysia's central bank governor

Malaysia's new government will study a project announced by the previous administration to form a new trading link between the stock markets of Singapore and Malaysia, Prime Minister Mahathir Moha-mad said yesterday.

The Monetary Authority of Singapore (MAS) and Securities Commission Malaysia had said in February that they would work together to set up a stock market trading link by year-end to enable share investors from both countries to trade on Bursa Malaysia (BM) and the Singapore Exchange (SGX).

The link, first announced by then Prime Minister Najib Razak, would provide access to a total of 1,600 public-listed firms worth more than US$1.2 trillion (S$1.6 trillion).

Tun Dr Mahathir also announced yesterday that he had accepted the resignation of central bank governor Muhammad Ibrahim and would meet the King as soon as possible to discuss a successor.

"We have not decided on his successor because we need to have the approval of the Agong before we can announce," Dr Mahathir told reporters after the weekly Cabinet meeting yesterday, referring to the King.

Mr Muhammad, whose five-year appointment was set to run until 2021, had offered to resign on Tuesday. His departure comes after new Finance Minister Lim Guan Eng said last month that the RM2 billion (S$671 million) paid by the central bank to the previous administration for a piece of land had been used to help settle debts of troubled state fund 1MDB.

A MATTER OF TRUST

I am prepared to relinquish my post if I no longer have the strong trust and support of the public. I cannot in good conscience continue if it affects the bank's image and reputation.

CENTRAL BANK GOVERNOR MUHAMMAD IBRAHIM

Asked by reporters if Mr Muhammad's resignation was linked to the land deal, Dr Mahathir said: "He didn't say a concrete reason."

The central bank has said it bought the land from the Finance Ministry at market prices.

Last month, the bank said it "has extended comprehensive information on the transaction to the Malaysian Anti-Corruption Commission for its complete and independent review".

In a note to central bank staff yesterday, Mr Muhammad dismissed as "totally untrue" the perception that the deal aimed to intentionally aid the misappropriation of funds through 1MDB, reported Reuters.

In a text message to national news agency Bernama yesterday, the Harvard-educated Mr Muhammad said he was resigning as public confidence in the bank has been eroded over the land deal.

"As a central bank, we are only as effective as the trust and confidence that the people of Malaysia and its leaders place in us," he said, according to Bernama. "I am prepared to relinquish my post if I no longer have the strong trust and support of the public. I cannot in good conscience continue if it affects the bank's image and reputation."

Mr Muhammad was appointed in May 2016 following the retirement of long-serving governor Zeti Akhtar Aziz. He had joined the bank in 1984 and became a deputy governor in 2010.

Sources told Reuters that former deputy governor Nor Shamsiah Mohd Yunus, who left in November 2016, was among the candidates eyed to replace him.

Dr Mahathir also announced yesterday that the first Parliament meeting of the 14th Dewan Rakyat, or Lower House, will commence on July 16 and sit for 20 days.

"In that time, we will discuss several papers and work on repealing several laws as we promised," he said, referring to election pledges by his Pakatan Harapan coalition to repeal the goods and services tax and the Anti-Fake News Act.

A version of this article appeared in the print edition of The Straits Times on June 07, 2018, with the headline 'KL to relook plan for trading link with S'pore'. Print Edition | Subscribe