THE day of reckoning draws near with the task force investigating Bank Negara Malaysia (BNM)‘s billions of ringgit losses in forex trading in the 1990s reaching the tail end of its inquiry and ready to submit an interim report to the Cabinet.

Surprisingly, until now, former prime minister Dr Mahathir Mohamad has not been invited to go before the task force and share what he knows or does not know about the trading that led to losses of US$10 billion (RM42.7 billion) 

Given that the rogue trading at the central bank happened during his watch and that much of the vitriol in the run-up to the setting up of the task force was whether there was any attempt to cover-up the losses by the government of the day, it was expected that Dr Mahathir would be invited to testify.

As it stands now, nearly all the blame for the colossal misadventure is likely to fall on former economic and planning minister Nor Mohamed Yakcop. 

Government sources told The Malaysian Insight that a contrite Nor Mohamed gave the task force a detailed account of the key role he played in the forex trading and the losses at the central bank.

It was clear that loose controls and supervision led to speculation in the world money markets. The task force were informed that such reckless trading is not possible today with much more controls in place at BNM.

Nor Mohamed spent 45 minutes before the task force yesterday, answering their questions on what had caused the massive losses.

This was a day waiting to happen ever since BNM reported in 1992 that its other reserves had plunged from RM10.1 billion ‎in 1991 to RM743 million in 1992, a loss of RM9.2 billion.

There was also a contingent liability of RM2.7 billion. In 1993, BNM disclosed another forex loss of RM5.7 billion.

The then BNM governor Jaafar Hussein called the whole episode an unfortunate chapter in the central bank’s history. He took responsibility and resigned as did Nor Mohamed.

But the episode never went away. It was raised in every election cycle by the opposition as an example of the financial mismanagement allowed and abetted by the Barisan Nasional government.

The BN government ignored the verbal jabs. Even when Nor Mohamed returned to government as an economic advisor to Dr Mahathir, and later as a minister in the Abdullah administration, Putrajaya sidestepped talk of promoting the man behind the BNM scandal.

Ironically, a fight between two Umno heavyweights provided the impetus to finally come clean on the forex losses that happened more than two decades ago.

Dr Mahathir has been attacking Prime Minister Najib Razak relentlessly over scandal-ridden 1Malaysia Development Bhd (1MDB). The Najib government hit back by saying that Dr Mahathir should not preach because billions were lost on his watch. The BNM scandal was just symptomatic of how losses and scandals were dealt with by Dr Mahathir. 

In its interim report to the Cabinet, the task force headed by former chief secretary to the government, Sidek Hassan will have to state if there was any attempt to hide the losses or if misleading statements on the episode were made to Parliament.

Nor Mohamed appears to have said that the buck stopped with him. ‎

For the main actors in the BNM scandal, it has been embarrassing and humiliating remembering the most unfortunate episode in the bank’s history.

For Malaysians, it has been just a reminder that expensive scandals have pockmarked every era since the country achieved independence in 1957. – May 27, 2017.

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