1MDB’s vocal critic is an unwarranted casualty of its fallout

This article first appeared in The Edge Financial Daily, on September 25, 2018.
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DATUK Seri Nazir Razak was an early and vocal critic of 1Malaysia Development Bhd (1MDB) and the opaque manner it was managed.

It is, therefore, sad that he is now a casualty of the 1MDB fallout, as the new government which came to power on the back of public anger over the financial scandal makes further leadership changes at government-linked companies (GLC).

CIMB announced yesterday that Nazir will step down as chairman of the bank on Dec 31. He started as a junior executive there 28 years ago.

Most people will point to the fact that Nazir had received money (now discovered to have originated from 1MDB) from his brother, former prime minister Datuk Seri Najib Razak as contribution to be passed to others for the 2013 general elections. But like many, he would not have imagined back then that the money came from 1MDB.

When 1MDB was set up in Sept, 2009, Nazir had questioned the need for another sovereign wealth fund and the fact that 1MDB was not governed under the GLC framework of governance. When 1MDB issued its first bond — the RM5 billion 30-year sukuk arranged by AmBank Bhd — he criticised the mispricing of the bond, which was issued at a steep discount and carried a high coupon rate of 5.75% despite being guaranteed by the government.

Suspicious about where 1MDB was heading, Nazir issued a directive that CIMB does not do any business with it. It was a decision which upset some of his staff because of the loss in potential revenue from corporate lending and investment banking transactions.

When the troubles at 1MDB began to surface with the delay in the release of its audited accounts sometime in late 2013, he worked hard behind the scenes to engage his brother and other senior government officials to address the problems. He warned them of the threat an implosion of 1MDB would pose to the country’s financial well-being.

After it became clear to him that no action will be taken, Nazir began to make his views public especially via his Instagram postings.

In January, 2014 he penned an article Remembering My Father, Tun Razak as an oblique reminder to his brother not to taint the reputation of their father.

Nazir wrote that one minister who served under his father told him: “As the custodian of the nation’s coffers, his frugality was legendary. You had to account for every cent, or he would be on your back.”

In February, 2015, responding to a New York Times article which quoted a Najib’s spokesman as saying that the prime minister was wealthy because he had inheritance money, Nazir and his three other brothers issued a statement to dispute what was said.

“We wish to put on record that Tun Abdul Razak was a highly principled man, well-known to all who knew him for his frugality and utmost integrity and any statement or inference to the contrary would be totally false and misleading to his memory and to his service [to] and sacrifices for the nation. We take issue with anyone who taints his memory, whatever the motive. We would also like to add that our whole family is united on this issue,” said the statement which was signed by Nazir, Johari, Nizam and Nazim.

Nazir was among those who pressed for Parliament to investigate and he criticised 1MDB’s first CEO Datuk Shahrol Halmi and Arul Kanda Kandasamy when they refused to attend the inquiry by the Public Accounts Committee .

Because of his criticisms of 1MDB, Nazir was attacked by the mainstream media controlled by Umno as well as by Umno-sponsored bloggers. He and his family were also victims of a blogger — ahrily90 — who posted vicious attacks on them.

The Edge on Feb 4, 2015 exposed that this blogger was the same person who attacked our chairman Datuk Tong Kooi Ong and Tun Dr Mahathir Mohamad who, like Nazir, had been asking questions about 1MDB.

Ahrily90 was also behind two websites (since taken down) that promoted Low Taek Jho or Jho Low as a smart financier and generous donors to various charities.This confirmed to us that our criticisms of 1MDB were correct and that Jho Low and his cohorts were getting uncomfortable with all the questions we were asking.

It was a frustrating time for us as our efforts were going nowhere. 1MDB, by then led by Arul Kanda, kept refuting our reports and denied that anything was wrong.

I can reveal that The Edge and Nazir worked together, in our respective ways, to expose the wrongdoings at 1MDB to get the government to act against those responsible.

Work was done behind the scenes for a solution. But none could be found.

Instead, in July 2015, Najib sacked his deputy Tan Sri Muhyiddin Yassin and removed investigators. The Edge was also suspended.

By then, there was nothing more Nazir could do. He was misled by his own brother.

Nazir was also personally conflicted, as Najib was the creator of the monster that he had warned against from inception. Despite that, Nazir was probably the only corporate leader to have publicly voiced out his concerns about 1MDB.