This article first appeared in Corporate, The Edge Malaysia Weekly, on April 25 - May 1, 2016.

SPECULATION is rife as to what will happen following the internal review at CIMB Group Holdings Bhd of the transfer of US$7 million made by its chairman Datuk Seri Nazir Razak at the request of his brother, Prime Minister Datuk Seri Najib Razak, in the run-up to the 2013 general election.

“There are three possible scenarios from the review,” observes a head of research at a foreign research house.

“One, the findings are positive and Nazir is back to being chairman and everything is status quo. Another potential outcome is the findings from the review are positive but Nazir decides to step down as chairman, taking on an advisory role at CIMB. And then there is the potential outcome of the findings being negative,” he says.

Asked to comment on the potential outcomes of the review, managing director of Aberdeen Asset Management Sdn Bhd Gerald Ambrose tells The Edge things could either be status quo, or the reviewers may make recommendations to change some practices at the bank.

“I respect his [Nazir’s] decision. It is doing the right thing and a positive move to take a leave of absence,” Ambrose says.

The seasoned fund manager says he reported to Nazir in the past, when they were both working at CIMB Securities during the early 1990s.

“He was a good boss. A lot of things were happening in the markets back in 1993, but he never lost it. At that time, a lot of people got carried away … you could see joy turning into tears in an instant in the trading room, but Nazir stayed very cool,” Ambrose says.

“He is a pretty exceptional guy and he is very passionate about CIMB. He did build the brand and he is obviously very sensitive to anybody trying to destroy it. So, now he thinks it is the best thing for him to step back and let the independent review be conducted without any interference,” he says.

While there are mixed views on the outcome of the internal review of the bank’s processes, corporate Malaysia and the investing community generally view Nazir’s move to take a leave of absence positively.

“It is the right thing to do,” says an associate director at a foreign financial institution.

A banking analyst who covers CIMB says: “It is refreshing for corporate Malaysia to see this happen. This is a first for a leader here, be it from the corporate or non-corporate arena. It should set a precedent and an example.”

Transparency International Malaysia has hailed Nazir’s decision to take a voluntary leave of absence pending an independent review of the bank’s processes as “noble”. Its president, Datuk Akhbar Satar, was reported as saying: “It shows good governance and transparency. Other Malaysians in a similar position should show such a good example.”

Meanwhile, industry observers point out that Nazir has been quite active in the public arena since last year, commenting on current issues via social media. The top banker’s Instagram account has over 47,400 followers.

“Nazir seemed to be more active in the public space … if he does take a step back following this, perhaps he would take on an even more active role in the public arena. Malaysia needs more leaders like that,” says an industry observer.

Last August, Nazir had called for a national consultative council to discuss the country’s future amid widening political and economic uncertainty.

“We need to sit down together to discuss what needs to be done to make structural changes for the future and the next generation. God willing, there will be people who will listen,” Nazir had reportedly said.

The first consultative council, which was formed in 1970, was chaired by Nazir’s father, the late Tun Abdul Razak, who was then deputy prime minister. It was set up to discuss critical issues on how to preserve harmony and foster unity among Malaysians after the May 13, 1969 race riots.

The youngest son of Malaysia’s second prime minister, the late Abdul Razak, Nazir studied economics and politics at the University of Bristol where he met his wife Datuk Azlina Aziz who was studying economics and accounting there.

Starting as an executive in the corporate finance department of Commerce International Merchant Bankers Bhd (now known as CIMB Investment Bank) in September 1989, Nazir rose up the ranks to become CEO in 1999. He passed the CEO baton to Tengku Datuk Seri Zafrul Aziz and took on the chairmanship of CIMB in September 2014.

Nazir spends most of his time in London now, with his wife and two children. In 2014, Nazir together with David Chua, acquired a 51% stake in British luxury furniture brand, Linley, founded by Queen Elizabeth II’s nephew, Viscount Linley.

Last Monday, Nazir said to a room packed with reporters that he had told the bank’s board earlier in the morning that unless he is completely absent from the bank during the review process, CIMB would not be practising the highest standards of corporate governance.

“When the review is complete, the board will then deliberate on the outcome ... and it will make the decision on whether to welcome me back or not,” he said.

Nazir also said CIMB had informed Bank Negara Malaysia of this internal review, given the central bank’s role in regulatory matters.

Nazir maintained that there was nothing unethical about the fund transfer. Hence, he had not gone public about it until The Wall Street Journal (WSJ) report on it was published.

Responding to WSJ’s March 30 report, Nazir told The Edge Financial Daily on March 31: “I think people will make their own decisions. But the fact is, there was nothing wrong in what I did. My brother asked for help and the help didn’t involve doing anything wrong, so I helped. I didn’t benefit in any way, nor did I think that it would be controversial in any way. But I accept that, given the scrutiny and interest in this current controversy, I am scrutinised.”

Audit firm Ernst & Young began the review on April 5 and CIMB expects it to be completed in a few weeks.

At the annual general meeting last Monday, shareholders re-elected Nazir as chairman of the group. 

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