THE Royal Commission of Inquiry (RCI) tasked to probe Bank Negara’s (BNM) forex trading losses in the 1980s and 1990s will present its findings to the king tomorrow.

The RCI has sent out a notice that RCI chairman Mohd Sidek Hassan would submit a report to the Yang Di-Pertuan Agong at Istana Negara at 5pm tomorrow. Yusof could not be reached for comment. 

“The report will be made public only with the consent of the Yang Di-Pertuan Agong,” said RCI chief conducting officer Suhaimi Ibrahim when contacted.  

Nine days of hearing were held during the period August 21 and September 19. 

Twenty-five witnesses were subpoenaed to testify, including former prime minister Dr Mahathir Mohamad and former deputy prime minister Anwar Ibrahim, who is currently serving a five-year jail sentence for sodomy. 

Former second finance minister Nor Mohamed Yakcop, who was BNM adviser during the period of the losses, was also heard.

The panel went through 42 documents, some of which were classified under the Official Secrets Act (OSA). None of the documents were made accessible to the public or watching brief lawyers representing Dr Mahathir, Anwar, and BNM.

The RCI was find out to the extent of BNM’s losses from forex trading  in the late 1980s until 1994, and whether any laws were broken in the process.

Opposition members and Dr Mahathir have called the RCI politically motivated and aimed at tarnishing the reputation of the former prime minister, who is now leading opposition bloc Pakatan Harapan.

Dr Mahathir had testified that what he knew of the losses was based on the audited reports presented to the cabinet and tabled in Parliament, and that the figure was nowhere near as high as the RM30 billion stated in recent claims.

The RCI came about after former assistant governor Murad told the New Straits Times in an interview that the losses in the early 1990s were much higher than the RM9.3 billion BNM had reported in its 1994 annual report. The government then formed a Special Task Force to determine the need for an RCI.

Sidek, who led the task force, was subsequently made chairman of the RCI, drawing claims of bias and prejudice from the opposition and Dr Mahathir’s lawyers. 

When contacted today, lawyers said they had nothing to add beyond what was their submissions, which were presented to the panel on September 21.

Mohamed Haniff Khatri Abdulla, lawyer for Dr Mahathir, had said in his submission that the RCI was wrong not to declassify audit reports and documents, which would have shed further light on the central bank’s currency trades.

Haniff had protested that lawyers were barred access to the documents during the proceedings.

“The chairman did not make any ruling and yet opined that the RCI was not bound by the Official Secrets Act, which is a major error in law,” he said in his written submission.

“It would, therefore, not be in the interests of this RCI to proceed with any further recommendation, which has not complied with the provisions negating criminal exposure to any of the commissioners, officers or witnesses.”

Anwar’s lawyers, Sivarasa Rasiah and Gurdial Singh said the audited figure of RM31.5 billion in losses, reported by former BNM accounts manager Abdul Aziz Abdul Manaf in a 2007 accounting treatment could not be verified.

The lawyers also attacked Murad’s credibility, saying the RCI should take note a prior conviction for failing to disclose assets up to RM23 million in assets in 1999.

The RCI saw contradictory witnesses’ accounts about the atitude and behavior of Dr Mahathir Mohamad and Anwar Ibrahim towards the losses. Witnesses also contradicted as to when and how both men learnt of the full extent of the losses. 

The inquiry also saw testimonies of poor quality from witnesses in their 70s and 80s who were hazy on dates, names and figures.

Witnesses, which included former traders and former administrative managers of BNM, testified to the lax rules that governed forex trading at the time and also to the lack of administrative oversight as the central bank began to aggressively pursue the activity.

Former staffers maintained that they operated within their job scope and testified that they never had the full picture of the losses or were oblivious to them until it was too late.

Testimony also showed that issues were usually never raised beyond their supervisors, indicating a culture that did not question authority even in the face of possible crisis. – October 12, 2017.