Prominent banker Nazir Razak, who has been critical of the state of Malaysia's institutions and politics, has found himself embroiled in a financial scandal swirling around his brother, Prime Minister Najib Razak.
The Wall Street Journal (WSJ) reported that Datuk Seri Nazir received US$7 million (S$9.4 million) transferred into his account from his older brother's, and the money was then disbursed to Umno politicians ahead of the 2013 General Election.
The newspaper said that Mr Nazir, who was chief executive of CIMB at the time, confirmed in a statement that the money was distributed in accordance with instructions from party leaders. He also said he believed the money was from donations he helped to raise from Malaysian companies and individuals for the election.
"I had no knowledge whatsoever that these funds may have originated from any other source," he said in the statement. "The entire amount was paid out in cash to various recipients according to the instructions of the party president, and the account was closed with a zero balance."
The WSJ article centred on allegations that money from 1Malaysia Development Berhad (1MDB) was used by Datuk Seri Najib, the state investor's advisory chief, for both political and personal purposes.
1MDB has denied the allegations, while Mr Najib has insisted that US$681 million found in his personal accounts was a donation from the Saudi royal family "to be used as the Prime Minister saw fit".
The Prime Minister's Office accused the WSJ of bias yesterday, saying in a statement that the newspaper's position has shifted to "admit that at least some of the funds" came from Saudi Arabia.
Mr Nazir's involvement in the disbursement of political funds has drawn surprise. Since becoming CIMB chairman in 2014, he has been vocal about national issues. He has slammed 1MDB and called for its board to resign, while bemoaning the state of the country that his brother has governed since 2009.
Last June, he announced plans to launch a non-governmental organisation with former deputy minister Saifuddin Abdullah to champion moderate views. "I just can't see how our institutions can recover, how our political atmosphere can become less toxic, how our international reputation can be repaired," he had said in February.
Datuk Saifuddin, who left Umno last October, told The Straits Times he was quite surprised by the WSJ report, as he was unaware that Mr Nazir had been involved in disbursing party funds, although raising money to help politicians is a normal practice.
Malaysia's integrity minister Paul Low, who heads a newly established committee to recommend regulations on political funding, made it clear that such activities were "not regulated at all".
He said: "This is precisely why we need regulations to distinguish (between) what are political funds and what are not, and if it is political, then we must ensure full disclosure."
A top finance executive familiar with political funding told The Straits Times that "as CEO of a major bank, I wouldn't do it, because now you are tarnished".
"I understand wanting to help (Mr Nazir helping his brother), but admitting you helped raise funds will lead people to assume it came from your clients because every big guy in town was his client. It raises the question of 'fit and proper'. Putting it in your personal account also seems careless," he said.
Mr Nazir did not specify the individuals the money was disbursed to, or why his personal account was used. CIMB officials have not responded to queries.
Adding to 1MDB's woes, Luxem- bourg's state prosecutor has laun- ched an inquiry into allegations of money laundering by 1MDB in 2012 and 2013, Reuters said yesterday.
The prosecutor said there was evidence that funds held by the Malaysian government in offshore accounts in Singapore, Switzerland and Luxembourg had been misused, it said.