Questions over Bank Rakyat chairman’s termination

By Emmanuel Samarathisa

BANK Rakyat chairman Datuk Noripah Kamso’s tenure with the development finance institution (DFI) came to an abrupt end on April 3.

According to Bernama, her tenure “expired effective” that day and that the bank is in the process of finalising a successor.

But contrary to what had been reported by the national newswire, her tenure actually ends this December. Therefore, the timing of her termination and the manner in which it was done raise three questions:

What were the reasons for ending her tenure?

Noripah was appointed on Dec 11, 2018, by then Entrepreneurial Development and Cooperatives Minister Datuk Seri Mohd Redzuan Md Yusof, who is now a minister in the Prime Minister’s Department.

Under Noripah’s watch, the bank recorded a steady performance with a net profit of RM1.15 bil for the year ended Dec 31, 2019, and a profit before tax and zakat of RM1.79 bil.

According to Bank Rakyat’s March 28 press release, the positive performance was achieved through a higher year-on-year net income of 3.26% due to growth in core operating income and a lower year-on-year funding cost of 1.62% following the cut in the Overnight Policy Rate in the second half of 2019.

Further, Bank Rakyat’s total assets grew 2.6% to RM109.62 bil in 2019, with year-on-year growth mainly contributed by financing and advances of 2.8% to RM70.97 bil. Return on assets during the year remained healthy at 1.7%, well above the domestic banking industry of 1.6%.

But, for now, both the bank and the ministry, now under Datuk Seri Wan Junaidi Tuanku Jaafar, have been silent.

Will her successor be a politically exposed person?

Sources say that Noripah’s removal had been political since there was a change in government with Perikatan Nasional (PN) now in charge of Putrajaya.

But that, too, is bizarre given that the minister who appointed her still is in government, albeit with a different portfolio.

Some say that PN has to placate its stakeholders, meaning component parties under its umbrella, especially Umno and Bersatu.

It’s worth remembering that Noripah is not a member of any political party and is a career banker. She was the chief executive of CIMB-Principal Islamic Asset Management Sdn Bhd and also of CIMB-Principal Asset Management Sdn Bhd.

She was a member of the board of BIMB Investment Management Bhd and Top Glove Corp Bhd. She was chairman of the Islamic Finance Industry Council, Malaysia-US Chamber Of Commerce, based in Washington DC.

She was also former president of Malaysian Futures Brokers Association.

And what about corporate governance?

It’s worth remembering that Bank Rakyat has been the subject of controversy. Noripah took over from Tan Sri Shukry Mohd Salleh. Shukry was removed on Nov 26, 2018 due to his involvement in the original audit report of 1Malaysia Development Bhd (1MDB).

Also, in 2016, corruption allegations surfaced involving then chairman Tan Sri Abdul Aziz Zainal and managing director Datuk Mustafha Abd Razak.

Mustafha allegedly committed criminal breach of trust of the bank’s marketing expenditure allocation which involved some RM15 mil while Abdul Aziz purportedly abetted him. The case went to court, but in June last year, both were acquitted and discharged after new developments emerged, which resulted in the prosecution withdrawing its charges against them.

Noripah’s appointment marked a break from the past and helped put the bank on a renewed path. Her untimely dismissal raises questions over corporate governance especially with regard to DFIs. – April 7, 2020

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