RCI: 1990s FOREX Losses

Monday, 21 August 2017 | MYT 9:55 PM
PUTRAJAYA: Former Bank Negara Malaysia (BNM) assistant governor Datuk Abdul Murad Khalid told the Royal Commission of Inquiry (RCI) on the 1990s forex losses that he did explain the matter to then Finance Minister Datuk Seri Anwar Ibrahim in early 1994.

He said the response from Anwar was that if the real foreign exchange losses by BNM was to be made public, then he (Anwar) would have to resign.

“Datuk Seri Anwar Ibrahim asked me to fly with him to Hawaii to explain the foreign exchange losses as instructed by then BNM Governor Tan Sri Jaffar Hussin,” he added.

Prior to that, Abdul Murad said he informed Jaffar, during a visit to the Chemical Bank in New York, that BNM’s losses with Chemical Bank at that time was about RM715mil.

“The governor did not believe it and scolded me, and told me to discuss the matter with Nor Mohamed Yakcop, then BNM advisor (1992),” he added.

Abdul Murad, who was then BNM advisor, said this at the second RCI proceeding at the Palace of Justice here.

He said the foreign exchange transaction carried out by BNM then involved US Dollar, Pound Sterling, Deutch Mark, Japanese Yen and French Franc and made on the instruction of the then BNM advisor (Nor Mohamed).

He said there was no written manual on the check and balance system in BNM foreign exchange then.

Abdul Murad said that during an interview with the media on Jan 27, 2018, he had said that BNM could not be involved in transactions that were speculative in accordance with the Central Bank of Malaysia Ordinance 1958.

“However,the foreign exchange dealings carried out in the 1980s and in 1990 until 1993 were speculative and were not based on assets, but more of gambling,” he said.

He said the foreign exchange losses incurred by BNM then was the biggest scandal in the world’s banking history.

“Hence, a cover-up had to be done to protect the image of BNM and the Malaysian government,” he said, adding that BNM did take action by asking Nor Mohamed and Jaffar to resign.

Abdul Murad said he only exposed BNM’s foreign exchange losses during an interview with the media on Jan 27 this year, which was 24 years after the transactions were carried out, because he had the opportunity to do so.

The proceeding, which was opened to the public and chaired by Tan Sri Mohd Sidek Hassan, continues on Aug 24. Assisting Mohd Sidek, who is Petronas chairman, are High Court judge Datuk Wira Kamaludin Md Said, Bursa Malaysia chief executive officer Datuk Seri Tajuddin Atan, Special Task Force to Facilitate Business (Pemudah) co-chairman Tan Sri Saw Choo Boon and Malaysian Institute of Accountants member K. Puspanathan. – Bernama

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