This article first appeared in The Edge Malaysia Weekly, on January 16 - 22, 2017.

THINGS have taken an ugly turn ahead of a change in leadership at Bank Islam Malaysia Bhd. Last Thursday, the country’s oldest Islamic bank was compelled to issue a press statement defending the reputation of its outgoing managing director Datuk Seri Zukri Samat and that of the bank.

This was in response to a Facebook post by one Raja Mohd Shahrim a day earlier, saying that the bank’s chief operating officer Datuk Norasni Ayob and Zukri had been suspended by the board.

“With reference to the FB posting by Raja Mohd Shahrim … regarding the managing director … I would like to state that there is absolutely no truth in the posting. We regret that during the last few months of Zukri’s tenure at the bank, that this irresponsible and unfounded allegation has surfaced. For the record, Zukri is due to retire in June 2017,” Bank Islam chairman Datuk Zamani Abdul Ghani said in the press statement.

He added that the board has full confidence in Zukri as he completes his tenure and helps implement a smooth transition to his successor.

It is understood that the bank is still looking for his replacement.

The Edge reported last month that Zukri, 58, who is also the CEO of the bank’s listed holding company BIMB Holdings Bhd, planned to retire from both roles once his contract at the bank ends in early June. He was understood to have informed the board of his decision some months ago. He has been in the driving seat of Bank Islam for over a decade.

In the press statement, Zamani reaffirmed that Zukri is “of high repute” and that under his leadership since June 2006, the bank has undergone a transformation and achieved remarkable financial growth. “Today, Bank Islam is the leader among standalone Islamic banks in Malaysia,” he said.

While the statement clearly shows the board’s strong backing for Zukri, what is interesting is that there was no mention nor denial of the allegations against Norasni. The Edge understands from various sources that she has been on paid leave since last December amid an internal probe over a disciplinary matter.

According to the bank’s 2015 annual report, Norasni, who has over 31 years of experience in the industry, joined the bank in 2011. She manages five major operations, namely cash management, operations, contact centre, e-channels, and property and project management.

Her situation is completely unrelated to Zukri’s impending departure from the group, a source says, adding that it was unfortunate that the outgoing managing director’s reputation is being tarnished over social media. Zukri, who was brought in as part of a new management team to turn the bank around in 2006, is highly regarded by his peers.

This is not the first time Bank Islam has come out to defend him. In May last year, ahead of his service contract coming up for renewal in June, the bank denied rumours that he would be replaced. It said he would be reappointed and that Bank Negara Malaysia had approved the move.

This year, the drama unfolds again while the bank is close to coming up with potential candidates to replace him. Sources say while Bank Islam has an internal candidate — deputy CEO Khairul Kamarudin — it also has a headhunter scouting for external candidates.

In a few weeks, the headhunter is expected to submit some shortlisted names. For now, it is unclear whether it will choose one person to head both the bank and the holding company — like Zukri — as this will likely depend on the suitability of the candidate.

Datuk Badlisyah Abdul Ghani, the former CEO of CIMB Islamic Bank Bhd, is understood to be the preferred candidate of Lembaga Tabung Haji (TH) to replace Zukri. TH is BIMB’s controlling shareholder. It holds a 51.4% stake in BIMB, which, in turn, wholly owns Bank Islam.

Badlisyah was made deputy CEO at TH in July last year. He left CIMB Islamic in August 2015 shortly after he put a controversial post on his personal FB page questioning the authenticity of documents used by The Wall Street Journal in its reports on 1Malaysia Development Bhd. CIMB Group chairman Datuk Seri Nazir Razak said it was a technical matter on which Badlisyah should not have been commenting and that there would be an internal inquiry on the matter.

However, Badlisyah’s voluntary resignation rendered the holding of an inquiry unnecessary, the banking group clarified recently. Badlisyah has said his resignation was purely a professional decision that he had been considering years before the issue of his social media post was highlighted, and that the two events were not linked.

Meanwhile, Khairul, a lawyer by training, has been with Bank Islam since December 2005 and was its director of business development before he took on the newly-created deputy CEO post in late 2015. He has played a key role in transforming the bank’s consumer banking division over the years.

Ultimately, whoever replaces Zukri will have to have the endorsement of the bank’s board before finally being approved by Bank Negara. Bank Islam currently has eight members on its board, in which there is only one representative from TH, namely Tan Sri Shukor Husin, who is a non-independent non-executive director.

Observers say new board members could be brought in to replace those who have left such as Tan Sri Ismee Ismail and Datuk Johan Abdullah.

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