Malaysia's central bank governor quits amid land deal furor

Tommy Thomas, newly appointed attorney-general of Malaysia, speaks to media outside his office during the first day he report to work in Putrajaya, Malaysia, Wednesday, June 6, 2018. Thomas, 66, is a renowned senior lawyer whose first task will be to handle prosecution of the 1MDB case. (AP Photo)
A motorcyclist rides past the Bank Negara Malaysia (BNM) the country's central bank in Kuala Lumpur, Malaysia, Wednesday, June 6, 2018. Prime Minister Mahathir Mohamad accepted the resignation of Malaysia's central bank governor, Muhammad Ibrahim, amid a corruption investigation into the previous government. Muhammad Ibrahim gave no reason for quitting halfway through his five-year term. (AP Photo/Sadiq Asyraf)

KUALA LUMPUR, Malaysia — Malaysia's central bank governor has become the latest senior official to resign amid a corruption probe of the former government that appointed them.

Prime Minister Mahathir Mohamad said Wednesday the government accepted Muhammad Ibrahim's resignation and a replacement will be named once the Malaysian king gives his consent.

The resignations come less than a month after a surprise May 9 election defeat for then-Prime Minister Najib Razak ended six decades in power for the former ruling coalition.

The central bank is under scrutiny over a 2 billion ringgit ($500 million) land purchase from Najib's government. Proceeds were used to pay debts of the official 1MDB investment fund, which is under investigation for possible graft and money-laundering.

Muhammad denied wrongdoing and has said previously he would resign to avoid tarnishing Bank Negara Malaysia's reputation.

On Wednesday, Muhammad said the suggestion the bank overpaid to "intentionally aid and abet the misappropriation of public funds" was "totally untrue," according to the national Bernama news agency. He said the central bank had no knowledge of or control over how the proceeds were used.

"The 1MDB scandal has cost the country dearly and as a Malaysian myself, I am deeply angered, distressed and outraged," he was quoted as saying.

Najib set up the 1MDB fund when he took power in 2009. U.S. investigators say Najib's associates stole and laundered $4.5 billion from the fund from 2009 to 2014, some of which landed in Najib's bank account.

Mahathir, who was prime minister for 22 years until 2003, emerged from retirement to lead his alliance to an election victory. Mahathir has reopened investigations into 1MDB and banned Najib and his wife from leaving the country.

In addition to Muhammad, the country's attorney general and anti-graft chief also have been replaced.

The new attorney general, Tommy Thomas, vowed in a statement Wednesday there will be "no cover up" in the 1MDB case. He said his office will work with counterparts in the United States, Switzerland, Luxembourg and Singapore in investigations into 1MBD and speed up prosecution in the case.

"All are equal before the law and no one will be spared," said Thomas. "There will be no cover up."

His predecessor, Mohamad Apandi Ali, attempted to clear Najib of wrongdoing in 2016. He said some $700 million that landed in Najib's bank account was a donation from the Saudi royal family and most was returned. U.S. investigators say the money was from 1MDB.

Police have raided Najib's home and other properties, seizing 114 million ringgit ($28.7 million) in cash and hundreds of expensive designer handbags and jewelry.

The government has said Najib's administration conducted an "exercise of deception" over 1MDB and deceived Parliament over the country's financial situation.

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