Will new BNM rules affect Nazir Razak’s future at CIMB?

KUALA LUMPUR: New Bank Negara Malaysia (BNM) guidelines may impact on Nazir Razak’s position as CIMB Group chairman next year, according to a report in The Straits Times.

Under the Bank Negara rules issued early this month, chief executive officers of financial institutions are prohibited from taking over as chairmen of the board of directors.

The guidelines also stipulate that financial institutions must have a majority of independent directors on their respective boards, the report said.

The ST report said that while the rules were not expected to be applied retroactively, they could have “implications” for Nazir “when his position as director on the board comes up next year for renewal by the bank’s nomination committee.”

The report however does not explain what these implications are.

Nazir, who is the younger brother of Prime Minister Najib Razak, served as CIMB’s CEO between 1999 and 2014, before becoming chairman of the group.
The report said CIMB executives did not respond to requests for comment on how the bank intended to deal with the new guidelines.

The guidelines, said the report, were aimed at demarcating the separation of powers between the board and the management.

A senior central bank official, who spoke on condition of anonymity, told the ST that Bank Negara wanted to avoid situations where a “chairman could be in a position to oversee policies that were put in place when that person was CEO.”

The report said the new rules had forced Najib’s administration to appoint Abdul Wahid Omar chairman of government trust fund agency Permodalan Nasional instead of chairman of Maybank.

The ST report quoted unnamed senior aides of Najib as saying the prime minister had originally planned to appoint Abdul Wahid, who was minister in the prime minister’s department in charge of economic planning, as chairman of Maybank when he stepped down from the Cabinet in June.

However as Wahid had been president and CEO of Maybank between 2008 and 2013, they appointed him chairman of Permodalan Nasional Berhad instead.