RCI 'concludes' massive forex losses were hidden from BNM; puzzled how this could have been done
NST TEAM
New Straits TimesAugust 21, 2017
PUTRAJAYA: The first day of the Royal Commission of Inquiry (RCI) on the Bank Negara Malaysia foreign exchange (forex) losses has revealed that a massive RM31.5 billion lost between 1991 and 1994 was hidden from the central bank.
The commission’s chairman, Tan Sri Mohd Sidek Hassan, said: “We have made the finding today that BNM lost RM31.5 billion, and the figure was hidden from the Bank Negara reports. We have to find out who asked for it to be concealed.”
RCI panel members, he said, were puzzled as to how losses of such a grand scale could have gone unknown.
Sidek, after hearing former BNM assistant governor Datuk Abdul Murad Khalid's testimony, said he could not wrap his head around the fact that no action was taken by the central bank despite knowing that something was amiss.
“I find it very odd, for the life of me. Bank Negara Malaysia is a respected and distinguished institution. Surely there must be checks and balances and standard operating procedures?”
Seen scratching his head during parts of the proceedings covered by the media, Sidek also questioned why no efforts were taken by “those in the know” to dig up more information on the matter.
“When I was the chief secretary to the government, any issues related to public funding I would korek (dig) more to get more information from the secretaries-general,” he added.
Murad was the third witness called in to testify today.
In his 42-point testimony, Murad said he had told the then BNM governor, the late Tan Sri Jaafar Hussein, and also Datuk Seri Anwar Ibrahim, who was then the finance minister, of the alleged losses.
Earlier, Murad said he was certain that there were no investigations launched by BNM or any other enforcement agencies on the forex losses during that period.
“In my opinion, there were no investigations made by BNM or any other agency as it involved a huge amount of losses and the government was scared to disclose the amount of actual losses to the public. If the losses were disclosed (at the time), the finance minister, prime minister (at the time, Tun Dr Mahathir Mohamad) and the cabinet would be blamed and be held responsible.”
He also said there was no written policy in BNM at that time regarding forex.
“The practice that was adopted then was decided by the Banking Department manager and adviser, that was Tan Sri Nor Mohamed Yakcop.”
He also said the method used by the Accounts Department to record the Bank Department's forex trading was done in the Dealers Room and at the same time the processing division under the Banking Department would make confirmation with counter parties via telex.
“By right, the telex and dealers chits were handed over to the Accounts Department on a daily basis for record purposes. I am not sure if the telex and dealers chits had been submitted to the Accounts Department every day for them to be recorded correctly and accurately regarding the forex trading.”
Murad also said he was unsure who was responsible for keeping the dealing chits during the said period and this should be referred to the then Banking Department accountant Nasaruddin Zakaria.
He also testified that under the law, it was permissible for forex trading to transfer or convert assets to other foreign currencies, but the forex trading committed during that period was “speculative”, where assets were not backed up, but more in the form of gambling.
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