1MDB scandal: Malaysia Central Bank governor Muhammad bin Ibrahim steps down

The Malaysian government on Wednesday accepted the Central Bank governor's resignation over his role in debt finance in relation to the scandal-plagued state-owned investment fund 1Malaysia Development Berhad.

The resignation of Muhammad bin Ibrahim was announced in a brief statement released by Bank Negara, without specifying any reason for his resignation.

The Central Bank of Malaysia signed - at the behest of former prime minister Najib Razak - for the purchase of several pieces of land owned by the 1MDB to inject liquidity into the state-owned fund.

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The money raised from the sale was used to pay the liabilities of 1MDB, Malaysia's Finance Minister, Lim Guan Eng, said recently.

Najib lost his position as prime minister after the opposition won the general elections on May 9.

1MDB, which Najib created in 2009 and presided over until 2016, was created to attract foreign investment and create a financial district in Kuala Lumpur, but accrued a debt of 42 billion ringgit ($10.5 billion).

The former premier, who has been banned from leaving the country by order of the authorities, is being probed for an alleged siphoning of some $681 million from the 1MDB to his personal accounts.

Najib denied the allegations, claiming the money was a donation from a Saudi Arabian prince, an explanation that was accepted at that time by 1MDB, the Malaysia Anti-Corruption Commission and the then-attorney general, but the case was reopened after Malaysia's change in government.

Six countries, including the United States, Switzerland and Singapore, have opened a judicial investigation into the alleged 1MDB funds misappropriation.

The US Department of Justice has pegged the total amount diverted from 1MDB at $4.5 billion, of which some $1 billion is suspected to have been laundered in the US through the purchase of real estate, yachts, jewellery and artwork, among other things.