QUESTION TIME It was the press conference that everyone was waiting for. Rumours about Bank Negara governor Zeti Akhtar Aziz had been swirling and circulating as leaked information about RM2.6 billion entering the prime minister’s bank accounts entered the public domain.

Some of them were pretty nasty, making anonymous unfounded allegations of corruption against her - allegations which went strangely uninvestigated as the police mounted almost a witch-hunt against those who leaked the information about the RM2.6 billion ‘donation’ in a now familiar situation, where blowing the whistle is a bigger offence exacting quick retribution than the actual questionable act itself.

She had had a heart attack, some said; she was being investigated, others claimed; and she has a lot to answer for, others said. But she handled the press conference very well by most accounts and by looking at the answers given, carefully avoiding stepping into any other agency’s territory in terms of investigations.

The occasion was the revelation of the second-quarter economic and financial figures for Malaysia, but there was a crowd of journalists baying for much more than just that. What about 1MDB? What about the RM2.6 billion donation? Is she going to resign? And then there was the sliding ringgit. Will we peg the ringgit? Will we impose capital controls?

The answers were illuminating and cleared up a lot of questions, addressing doubts, and where Bank Negara stood as far as many things of public interest were concerned.

Let’s start with that self-styled strategic development company, which is anything but, 1MDB. Zeti revealed, without mentioning it by name but calling it - understatedly - a highly-leveraged entity, that they had been investigating it for more than two years.

Importantly, she revealed that investigations into 1MDB have now been completed and the details have been forwarded to the attorney-general for further action. She declined to divulge further details saying that this was against the law.

The question that arises from this is what is it that Bank Negara has unearthed from this investigation, which seems to clearly indicate that some form of recommendation has been made for prosecution.

However, Zeti did say that if she is called before the parliamentary public account committee (PAC), then she can reveal the details but not to the press conference. It is to be hoped that this is what the PAC will do after it is reconstituted during Parliament’s next sitting, not due until October.

Tellingly, the cabinet had decided earlier not to reconvene Parliament for a special session to reconstitute the PAC; four of whose members from the ruling coalition were appointed to the cabinet in the recent reshuffle - a minister and three deputies. Eventually, it was ruled that the PAC could not operate until it was reconstituted.

Other weighty matters

On to other weighty matters including the RM2.6 billion political donation into the prime minister’s accounts, Zeti said pointedly that it has passed on everything it knows to the relevant agencies responsible. She took pains to explain that banks are required to inform the central bank of any suspicious transfers.

However, Bank Negara itself cannot investigate the money trail or prosecute or give details, she made it clear while saying that all information from foreign authorities have also been passed on to the appropriate authorities.

The Wall Street Journal had reported these transfers of US$700 million (RM2.6 billion) into Prime Minister Najib Abdul Razak’s accounts, most of which came from a single transfer from Falcon Private Bank of Singapore.

Falcon’s website says that since 2009, the Swiss-based private bank, founded in  Zurich in 1965 as Ueberseebank and renamed AIG Private Bank in 1998, is owned by the International Petroleum Investment Co, an arm of the Abu Dhabi government.

Since the revelations, it has been acknowledged that the money was received as donations and it came from a Middle Eastern donor.

Presumably, the investigating authority to which the information has been passed is the Malaysian Anti-Corruption Commission (MACC). Under the MACC Act, all monies paid to public officials, including donations, are considered to be gratification unless proved otherwise. One awaits the outcome of these investigations, too.

She, of course, denied that she had had a heart attack or was going to resign saying she will finish her current term which ends in April. And she said she will take action against those who have defamed her once she knows who they are.

She also denied that she herself was being investigated while saying that seven Bank Negara officials were questioned over leaks of information pertaining to the transfer of money into Najib’s accounts.

That leaves her with nothing further to answer about these matters and it is now for MACC, the new attorney-general, and the police to clarify as to whether and how much they are proceeding with matters.

Dare we hope for some answers soon? If it does come soon, uncertainty gets reduced and Zeti was quick to say at that news conference that uncertainty is bad for the ringgit.

And she gave some certainty about the ringgit, no there will be no capital controls, no there will be no peg. Yes, the ringgit is undervalued. Really can any central bank give assurances that there will no capital controls or a peg? But no central bank will say that it is prepared to use its last line of defence. It just does it if the time comes.

P GUNASEGARAM is founding editor of KINIBIZ which produces an online business news portal and a fortnightly print magazine.