Outgoing Bank Negara governor Muhammad Ibrahim has told his staff that the central bank had no role in abetting the alleged misappropriation of public funds pertaining to 1MDB.

"The perception is that the purchase of the land was made to intentionally aid and abet the misappropriation of public funds pertaining to the corruption and scandal surrounding 1MDB. This is totally untrue.

"Bank Negara will never be party to any such activities that would betray the public's trust in us. We abhor any semblance of corruption and abuse of power," he said.

Malaysiakini learned that Muhammad communicated this message to his staff in an email, before Prime Minister Dr Mahathir Mohamad announced that the governor had tendered his resignation.

In the correspondence, Muhammad said the central bank did not know of nor had any control over the proceeds of the land acquisition.

It has been established that the Najib Abdul Razak administration had sold government land to Bank Negara and the proceeds were used to settle 1MDB's debts. 

"It is simply unthinkable for us to be associated with such a controversial entity mired with accusations of fraud and mismanagement.

"It is not in our nature to do such things. We even took enforcement action against them (1MDB) earlier," he said.

Muhammad was deputy governor when Bank Negara slapped 1MDB with several fines for violating the Financial Services Act 2013 and the Islamic Financial Services 2013.

Outrage over 1MDB

Muhammad said the 1MDB scandal had cost the country dearly and anyone associated with the matter would be tainted by association.

"As a Malaysian myself, I am deeply angered, distressed and outraged.

"This is indeed a matter of significant public focus and I can understand why any association with the scandal, unintended or otherwise, is invariably met with a strong sense of public outrage," he added.

Meanwhile, Muhammad explained that Bank Negara had already been scouting for land for its new Financial Education Hub since 2016.

When the acquisition was finalised, he was satisfied that everything was above board.

"Coming out fresh from the experience of a Royal Commission of Inquiry on the forex losses of 30-years past, the bank was careful to make sure everything was above board.

"We knew that we need to pass the test of public scrutiny in everything we do to maintain our reputation and confidence of the public," he said.

Muhammad also told his staff that Malaysia was now at a critical juncture and it was important to remain united as an institution.

"The Malaysian people expect nothing less than our full dedication and commitment. This institution is bigger than any individual, and I truly believe our best days are ahead of us.

"Let us draw courage, lessons and strength from this," he added.