KUALA LUMPUR, Malaysia — Malaysia’s billion-dollar political scandal claimed another casualty on Monday when the prominent banker Nazir Razak announced that he would temporarily step aside while his bank examined his handling of nearly $7 million he received from his brother, Prime Minister Najib Razak.
Mr. Nazir said he would take a leave of absence from his positions as chairman and director of CIMB Group Holdings after acknowledging that he took the money from his brother and distributed it, as he was instructed, to governing party figures before national elections in 2013.
“These events took place three years ago,” Mr. Nazir said at a news conference. “My brother asked for some help, and I agreed.”
“I acted based on what I knew at that time,” he said.
Mr. Nazir’s decision to step aside voluntarily while the bank conducted an internal review is likely to focus attention on the refusal of Mr. Najib to step down over more serious allegations, including that he deposited more than $1 billion in questionable funds into his personal bank accounts.
“This is definitely the right move, and it will certainly put more pressure on Najib,” said Wan Saiful Wan Jan, chief executive of the Institute for Democracy and Economic Affairs, a Malaysian research institute. “People will say, ‘Your brother is being internally investigated for just $7 million while you are accused of being involved with a much bigger sum of money.’ ”
News reports have charged that much of the money the prime minister deposited came from a government investment fund that he oversees, the 1Malaysia Development Berhad, commonly known as 1MDB.
Mr. Najib denies any wrongdoing and has resisted all calls to give up his post. The prime minister has, however, removed officials who were critical of his actions, including an attorney general, Abdul Gani Patail, and a deputy prime minister, Muhyiddin Yassin.
The prime minister’s office has sought to explain the deposits by saying that Mr. Najib received $681 million from the Saudi royal family as a gift with no strings attached and later returned $620 million of the donation. This version of events received backing last week when the Saudi foreign minister, Adel al-Jubeir, told reporters in Istanbul that the money was a “genuine donation.”
Mr. Najib’s office declined to comment on Monday about Mr. Nazir’s decision to take a leave of absence, saying it was a matter for CIMB.
Mr. Nazir, who at times has been critical of the 1MDB fund, which was created under his brother, was drawn into the scandal last month after The Wall Street Journal reported that he had received the $7 million from the prime minister and distributed it to governing party leaders.
Mr. Nazir said on Monday that he accepted the money after determining that the transactions would not violate any law and that he would not be abusing his position at CIMB.
But once the unusual transfers became public, he said, he recognized that it was “a cause of concern” and that he should step aside to safeguard the bank’s integrity.
“The reputation and well being of this banking group has always been my utmost priority,” he said. “Unless I am completely absent from the company during this period, this institution would not be practicing the highest standards of corporate governance that we want to stand for, and I would be undermining what I have described as my utmost career priority.”
CIMB, which began the review on April 5, expects it to be completed in a few weeks, according to a statement issued by the bank. The multinational audit firm Ernst & Young will assist.
Mr. Wan Saiful, the analyst, said that Mr. Nazir’s willingness to step aside while he was being investigated was a rare step for a public figure in Malaysia and showed his confidence that he would be exonerated of any banking violations.
Mr. Wan Saiful also said it was clear Mr. Nazir had not broken campaign finance laws because Malaysia did not regulate such funding.
See original post.