SECOND Finance Minister Johari Abdul Ghani’s open letter to Pakatan Harapan chairman Dr Mahathir Mohamad yesterday “very selectively” diverted attention to the Bank Negara forex losses while dodging the 1Malaysia Development Bhd scandal, said opposition leaders. 

PKR secretary-general Saifuddin Nasution Ismail said Johari was careful to point to the shortcomings of Dr Mahathir and former deputy prime minister and finance minister Anwar Ibrahim, who were in power when the central bank’s forex trading scandal broke in the early 1990s.

A royal commission of inquiry (RCI) into the scandal recently implicated the duo, who are now key figures in the opposition coalition Pakatan Harapan. 

“Johari’s statement seems to expose Dr Mahathir and Anwar’s shortcomings (while being) very selective to divert the issues towards the RCI and BNM forex scandal once again.

“It is quite obvious (Johari is) trying to accuse the old administration of having lack of control over BNM while avoiding the 1MDB issue,” Saifuddin said, referring to the 1Malaysia Development Bhd scandal. 

Yesterday, Johari in an open letter claimed that to make up for BNM’s losses, the government had to sell off BNM shares in Malaysia Airlines at RM8 per share and in Malaysian International Shipping Corporation at RM10 per share to Retirement Fund Inc.

The government was also forced to transfer to BNM its shares in Telekom and Tenaga Nasional Bhd for the nominal sum of RM1 per share. The shares were later revalued at RM22.10 and RM19.30 per share for Telekom and TNB, respectively.

“If these speculative foreign exchange losses were not real, the government would not have taken these drastic actions to cover the BNM losses at that material time,” Johari said.

He said BNM suffered the losses because it was involved in speculative trading on Mahathir’s watch.

He said an internal audit report said an “excessive” amount of speculative forex transactions took place during the Dr Mahathir era. 

The minister’s letter was a rebuttal of Dr Mahathir’s blog post on December 24 on BNM’s foreign-exchange losses. 

Dr Mahathir, who was prime minister from 1981 to 2003, said BNM’s international reserves had chalked a greater loss under the current Najib administration than the RM31.5 billion the central bank had lost in forex trading in the 1990s.

Prior to the post, Dr Mahathir had asked Johari whether the central bank’s reported loss of US$39.6 billion (RM161.6 billion) from 2013 to 2015 was due to outflows of foreign funds.

Saifuddin said Johari should also answer questions regarding 1MDB if he wished to speak about BNM. 

“If the so-called BNM control system is so watertight, why did the 1MDB funds transfer into MO1’s Ambank account go unnoticed?” the PKR leader asked. 

He was referring to the US Department of Justice’s allegations that millions of ringgit from the sovereign fund were transferred s into the personal Ambank account of “Malaysian Official 1”, who has been identified as Prime Minister Najib Razak by Minister in the Prime Minister’s Department Abdul Rahman Dahlan. 

“Honestly, we need to get more in-depth information on the Telekom, MAS and MISC share transfers. I believe Dr Mahathir is able to address this issue,” Saifuddin said. 

DAP’s Zairil Khir Johari said no Malaysian would take the government’s  “witch-hunt” over BNM’s forex losses seriously unless it was ready to do the same for 1MDB and Felda. 

The government has ignored calls for an RCI to investigate the 1MDB scandal as well as a series of Felda controversies, the most recent being a suspicious title transfer of four parcels of land worth an estimated RM1 billion in Kuala Lumpur. 

The ownership of the land parcels was transferred to a private company for only RM270 million. The scandal is now under police investigation. 

“Johari can say what he wants about the BNM losses – no one disputes heavy losses were made due to speculative strategies that ultimately did not work out as planned. 

“But it is completely disingenuous of Johari to ignore the elephant in the room – the 1MDB and Felda scandals that are currently ongoing and worse, linked to corruption and personal enrichment,” Zairil said. 

The Bukit Bendera MP and DAP national publicity assistant secretary said nobody profited from BNM’s forex trading losses but the 1MDB and Felda scandals were caused by “grand corruption and kleptocracy”.

“What is the government planning to do about the US Department of Justice’s allegations of corruption, embezzlement and dubious money flows into the prime minister’s personal bank account?” Zairil said. 

The DoJ in June this year filed several lawsuits to seize more than US$1.7 billion in assets that it said were brought with money stolen from 1MDB. 

US Attorney-General Jeff Sessions recently called the 1MDB case  ”kleptocracy at its worst”.

Meanwhile, Amanah information chief Khalid Samad said the BNM forex losses should have taught Putrajaya that the country’s economy and finances must be managed with transparency and accountability.

He said other financial scandals might have been prevented if the government were transparent and accountable.

“What have we learnt from the forex exchange debacle?

“That is why we have been asking for transparency in how the country handles the economy and its finances all this while.

“If there had been transparency, the people would had been better informed of what was happening at the time (of the forex scandal).

“The lesson Johari has to admit here is the government needs to be transparent so people guilty of mismanagement can be held accountable.

“Be transparent now with 1MDB,” the Shah Alam MP said.

Khalid said the people must be informed of financial misdeeds and the causes of the losses, and that the government must show responsible management as well as ensure that those guilty of wrongdoing did not get off scot-free.

“You cannot talk now as though it doesn’t apply to you. If you are sincere, then ensure there is transparency and accountability in the current administration now.

“Let’s not wait 30 years before you say there was a problem back then. Let’s not repeat the same mistake,” the Amanah leader said. – December 28, 2017.