THE Royal Commission of Inquiry (RCI) cannot conclude that Bank Negara’s losses from foreign exchange trading were RM31.5 billion from 1991 to 1994, as the audited figure was never verified, lawyers representing Anwar Ibrahim said in their written submission.

They said a 2007 audit had come up with figures that were different from what was presented in the annual reports for 1992 and 1993.

In their written submission to the RCI panel today, lawyers Sivarasa Rasiah and Gurdial Singh referred to “Accounting Treatment of Losses Arising from Active Reserve Management 1988-1994” prepared in 2007 by former BNM accounts manager Abdul Aziz Abdul Manaf, who was the RCI’s first witness. 

“It is beyond dispute that this audit was never verified and finalised. (Former BNM governor) Zeti Akhtar Aziz told the RCI it was not done as a proper audit as such, but to allow BNM to better prepare the new proposed legislation.”

The lawyers also said the RCI cannot “credibly deconstruct” the BNM annual reports that had been verified by the then auditor-general Ishak Tadin.

“The RCI panel chairman (Mohd Sidek Hassan), has repeatedly used the phrase ‘actual losses’.

“In our view, with respect, that statement begs the question: What are actual losses at the end of the day will finally depend on the approved balance sheet, profit and loss statement and where the methodology is… in the context of a central bank. 

“What are ‘actual losses’ perceived by the chairman, may not be, and in this case, were certainly not ‘actual losses’ for the external auditor who signed off, such as the auditor-general of the country.”

The written submission was handed to the RCI secretary Yusof Ismail at 5pm today. 

The inquiry saw 25 witnesses testify and inspected 42 documents, including classified audit reports, that are not available to the public. 

The lawyers also attacked former BNM assistant governor Abdul Murad Khalid, who was the central bank’s adviser during the time of the forex losses.

In January, Murad told the New Straits Times in an interview that the losses suffered by the central bank amounted to US$10 billion. He also accused Anwar of knowing the extent of the losses and may have concealed it from the public.

“It is clear that Murad is a person of little credibility. The RCI should take note that he was convicted of the serious offence of failing to disclose assets up to RM23 million and fined RM500,000 after pleading guilty.

“DSAI (Anwar) in his unchallenged evidence, alleged that Murad had paid judges to sort out his criminal prosecution. 

“Murad had to resign from BNM as a result of this prosecution. The fact that he had accumulated large assets of up to RM23 million in 1999 (at the age of 46) working as an employee in BNM from 1976 (since the age of 24), also raises some critical questions on his integrity.”

The RCI began hearing witnesses from August 21 and ended on Tuesday. 

As part of its terms of reference, the RCI will recommend “suitable actions” to be the taken against those found to be directly or indirectly involved in causing the losses and hiding the facts and information on the losses, which occurred 25 years ago. 

The panel will present its findings to the King on October 13. – September 21, 2017.