JAILED opposition leader Anwar Ibrahim began his testimony on the sixth day of the royal commission of inquiry (RCI) into billions of dollars of losses incurred by Bank Negara Malaysia’s foreign exchange trading some 25 years ago.

Anwar, who arrived at the Palace of Justice courtroom early today, will not be speaking from a prepared statement, the first witness to do so.

Anwar was finance minister from 1991 until 1998. The RCI is looking at forex losses suffered by the central bank’s trading arm between the 1980s and 1994.

A subpoena was sent to the Sungai Buloh prison director yesterday afternoon for Anwar to be brought to testify at the Palace of Justice, said his lawyers.

The PKR de facto leader has repeatedly called to be given a chance to testify in the RCI, along with former prime minister Dr Mahathir Mohamad.

Both men are currently heading the opposition four-party Pakatan Harapan coalition.

The Malaysian Insight brings you live updates from today’s proceedings:

5.02pm: Anwar’s session ends and proceedings are adjourned for the day. He leaves the courtroom, escorted by prison department personnel, after speaking to Tian Chua and PKR MP Sivarasa Rasiah.

4.58pm: Dr Mahathir’s lawyer Haniff Khatri Abdulla requested for Sidek’s permission to ask Anwar a few questions. It was granted.

Haniff: Do you remember all the meeting minutes for March 30, 1994 and April 6, 1994? Can you remember all of the discussions made in the past 27 years.

Anwar: *laughs* I do not remember all. The minutes are simple. The minutes showed a total of 40 minutes but the cabinet meeting would’ve gone on for three hours. Six hours if it was done by Dr Mahathir. *laughs*

Haniff: If there were any ministers who thought they were confused (during the Cabinet meeting) then they should come here (to RCI) including Najib?

Anwar: When they asked for an explanation, we gave an explanation.

Sidek to Haniff: Datuk Seri, who at that time was finance minister, said what was reported to the Cabinet was audited.

Haniff: At that time, from my understanding, he believed what was given to him, there was no loss.

Sidek: Therefore the Cabinet was not informed of the losses.

Anwar: That’s not right as well. RM9.3 billion was still a loss. If the minister was not stupid, if they understand, RM9.3 billion was brought up.

Sidek: They were aware of only RM5.7 billion.

Hanif to Sidek: Tan Sri, just to comment, you were not there at the cabinet meeting.

Sidek: Yes, I was not there, but I read the minutes.

Anwar: The role of the secretary-general or finance minister is to report any statements.

(If you want to question) All accounting roles, if that’s the issue, why not pick up Felda or 1MDB? We only take the audited report. Don’t make an exception in this case to abuse anyone.

If this is the government’s SOP then I can accept. If you are not happy, call the auditor to explain.

Why are you now focusing some other issues and avoiding others?

Please save this RCI to ensure its integrity remains intact. Please make sure we treat this professionally.

I rest my case. Thank you very much.

4.30pm: Anwar said he received Dr Mahathir’s full backing to handle the issue.

SCB: You took the issue very seriously when you were finance minister, and you single-handedly managed the whole issue. Am I right?

Anwar: The prime minister was supportive. I was given full support. Until 1998 lah. *laughs

Sidek said he admired Anwar for still being positive despite all.

Anwar: I’m laughing in tears (ketawa dalam tangisan).

*everyone laughs

4.20pm: Anwar and Sidek argued whether the true amount of losses were reported to the Cabinet.

Anwar: Dr Mahathir did not give instructions. I Instructed Clifford to prepare the report and we met Dr Mahathir. He never gave any instruction to proceed with forex or not. He just listened.

Sidek: Cabinet was not informed of the actual losses?

Anwar: Cabinet was informed of BNM’s audited report.

Sidek: Although they knew, as far as the Cabinet was concerned they were never informed of the actual losses.

Anwar: Reports made to the Cabinet was the final report.

Sidek: Means the Cabinet was only informed of the RM5.7 billion deferred expenditure?

Anwar: The entire financial account was presented to the Cabinet.

* They then bicker whether the cabinet knew of the actual losses or not for several minutes.

Sidek: I am sure you are smarter than that, Datuk Seri. Let’s move on.

Anwar: I reported in Parliament what was audited. Not what was said on the letter.

Dr Mahathir leaves the courtroom while PKR vice-president Chua Tian Chang, better known as Tian Chua, enters. Proceedings are ongoing.

4.00pm: Saw Choo Boon said Anwar was informed of the actual losses but decided to stick with the annual report figure, which was presented to cabinet and tabled in parliament.

Anwar: What should the head of department, Treasury secretary-general or minister do? Give your personal view or table a report given to you?

3.50pm: Mohd Sidek Hassan said Anwar was in the cabinet meeting on April 6, 1994 where it was stated there was no loss in 1992.

Anwar: RM9 billion might be forward position.

Twenty years later, we get new information and we glued them all together… that’s not right.                       

Sidek: You are talking about accounting treatment. I do not know how to make you understand my point.

Anwar: I took a major risk to talk about RM9 billion. No other minister would have done that. I took a major risk.

After six years in prison, I came out and it was still RM5.7 billion (losses) in 2007.

In 2012, it was still RM5.7 billion.

3.40pm: The cabinet meeting minutes on March 30, 1994 stated that deferred expenditure was RM5.7 billion net deficiency resulting from forex trading, Saw Choo Boon (SCB) said.

Saw Choo Boon: RM15.291 billion were actual losses RM5.7 billion can’t be absorbed to any reserve, so was put as deferred expenditure.

At another meeting on April 6, 1994, cabinet acknowledge the losses were RM5.7 billion, not the actual loss, which was RM15.291 billion for 1993, which you were informed about.

Why did you not disclose to the cabinet?

Anwar: I have explained the auditor general’s letter is confined to their discussion with BNM. What we brought to cabinet was the result.

In April 1994, we mentioned RM9 billion. What we said was also paper loss and forward position. The RM5.7 billion loss remains there.

On September 24, 2012, in parliament, I was there when the finance minister said losses in the early 1990s were RM5.7 billion as stated in BNM’s report.

It was still RM5.7 billion in 2007.

I must tell what was decided after deliberations between the central bank and auditor general.

Here, Mohd Sidek Hassan interjects: “You were there as minister of finance. You’re managing the economy of the country.

“You were told of the actual losses in the year. But you chose not to inform the cabinet.”

Anwar cuts off Sidek

Sidek (stressed): Let me speak first. I don’t think auditor general changed the actual Loss. We should differentiate how they treat accounting wise and actual losses. The fact is, was, losses were incurred and actual losses were not informed to the cabinet.

3.30pm: Saw Choo Boon (SCB) said the annual report did not show the loss, instead it showed a slight profit.

SCB: But we know and you know the losses occurred in 1992 and 1993. Accounting treatment showed in 1992, the loss was RM12 billion and in 1993, it was RM15 billion. It was put into the reserve. It would need a lot of analyses to see a lot has been lost. Why was this information not shared with the cabinet or PM?

Anwar: You are right what was tabled was audited. Questions were not raised. But to suggest they do not know about the losses were not true. They were aware.

SCB: They were probably aware of some losses but they do not know. The only figure given was RM5.7 billion.

Anwar: They were aware of the losses.

3.25pm: Losses for 1993 faced by BNM were RM15.391 billion and wasn’t the RM5.7 billion stated as deferred expenditure, asks conducting officer Julia Ibrahim.

Anwar: Personally, I was certainly not too happy. How can audit and board agreed? It was an issue and i informed the PM and he had the impression “there are times we make profit, there are times we make losses”.

I said I will give proper instructions for the bank to stop. They have to cease operations. Sheriff (MoF secretary-general Mohd Sheriff Mohd Kassim) said he brought it up to the board. Although I was not qualified, I understand it was a difficult a position.

3.10pm: Julia Ibrahim said a letter from Jaffar Hussein to the Treasury secretary-general in March 1994 stated that Anwar agrees to support the bank if it faces any issue.

Anwar: They were in need of government support. We have no choice but to give them. It was an unsettling issue. We had no choice, in the government’s law, we had to.

2.55pm: The conducting officer, Julia Ibrahim, shows Anwar a letter from deputy governor Lin See Yan, dated April 1, 1993, which confirmed the forex losses, highlighting a paragraph where he said the forex losses should not be disclosed to the public.

Anwar: The report was already out and the losses were RM9.3 billion and we could not explain it. We have to explain it.

After the letter, I told the governor to explain it. And he did in detail. He sent me the statement half an hour before media conference.

He is afraid all forex dealings will be exposed and might pose a threat the country. I disagree that it should not be explained.

Through a phone call, I said the thing should be explained by the governor. But it was reported in parliament and the governor can’t go to parliament. So I took over to explain it.

Anwar then informs the conducting officer that what the governor said was verified by the auditor general.

Anwar: As a finance minister, I can only explain to parliament and cabinet the audited statement. The issues raised were regarding the changes in accounting procedure. I can ask the governor directly but I can’t question what was approved by BNM and the auditor general.

I was not told how much of the losses came from forward trading. When I told them to stop, they wanted to unwind position. That was beyond me.

2.45pm: Anwar said he asked the governor to make a media statement to explain to the public on the state of the account in 1992.

2.38pm: The conducting officer shows Anwar a letter dated March 31, 1993 from him to the Treasury.

Then auditor general (Ishak Tadin) suggested research on the losses. Do you remember taking any action?

Anwar: Clifford Herbert discussed with the Treasury secretary-general and suggested a post-mortem to be done.

My view is that after the remarks from auditor general, there was a need and I believe Ishak is honourable and he would not have written to me if he thinks the matter isn’t serious.

2.30pm: The conducting officer, referring to the 1992 financial report, asks Anwar to confirm if it was the report tabled to cabinet. Anwar says “Yes”.

Anwar said he was aware of the “huge losses” before tabling the report.

“Tan Sri Zain (Treasury secretary-general Zain Azraai Zainal Abidin) said there was forex trading in BNM.”

But the governor said these were to protect the ringgit.

2.25pm: Anwar tells panel that a few months later, he received different information from his friends in Zurich. And when he went to Hong Kong, he was attacked and questioned by many regarding the losses at the central bank.

“Of course, I denied. I brought the case to (governor) Jaffar (Hussein) and he told me the figure was huge.”

However, the governor did not think the amount would cause any financial problem.

The conducting officer then asked Anwar about the annual report.

“The 1992 financial report – were you in any way involved in the preparation of BNM’s financial report for 1992?”

Anwar: Ministers are not involved. But I was shocked when KSP (Treasury secretary-general) gave a reminder that we might be suffering a huge loss.

There was a view from the auditor-general that we are facing a huge loss… but no report from the governor.

There would be a briefing prior for the report to be tabled. I was concerned and annoyed because the Treasury was informed and then only KSP came to know and I came to know afterwards.

2.20pm: Dr Mahathir Mohamad enters the room and sits in the public gallery.

2.18pm: Julia asks Anwar “When you were finance minister, when did you know about the forex losses?”

Anwar: Anyone following the economic developments in the country…and I believe the cabinet follows international media, which started criticising BNM’s administration in the 1980s.

There was a briefing by Adnan… They told me to pay attention to the negative reports and the board of directors of BNM.

As a minister, I could call the governor and seek an explanation.

2.10pm: A total of 14 prison officers escort Anwar into the courtroom to await the resumption of the hearing. His wife and PKR president, Dr Wan Azizah Wan Ismail, is also present.

2pm: Hearing resumes. Fourth witness for the day, Anwar, is called to the stand.

The Malaysian Insight brings you live updates from today’s proceedings:

12.06pm: Conducting officer Saw Choo Book asked Ahmad if he had discussed the reasons for the forex losses with his predecessor Jaffar Hussein.

Ahmad: I can speculate what happened. But we did not directly (discuss the matter).

12.28pm: Session ends, to be resumed at 2pm.

12pm: Ahmad said that reserve management policies stated that “the bank will not get involved in any activities that are purely speculative, but instead purely on an investment basis to preserve the value of reserve and optimise returns on investments”.

He said he sent a letter to Anwar dated August 8, 1994, containing matters relating to BNM officers’ morale and reserve management.

“I do not remember if I received any written reply from Anwar for the letter. However, a fee improvement in terms of salary and human resource was done on BNM.”

11.30am​: Third witness Ahmad Mohamad Don, former BNM governor, takes the stand. Ahmad said a management committee regarding BNM’s policies, outline and external reserve operations by the banking department was set up immediately after his appointment as governor.

“I do not know if there was a written policy regarding forex trading by BNM before I took over as governor in May 1994,” he said in his statement.

“I do not remember if there was a committee set up in BNM to monitor forex dealings before I took over as governor.”

10.21am: Second witness Hadenan Abdul Jalil, former auditor-general, takes the stand.

“I have never had any personal discussions with the governor or then finance minister on the forex losses suffered by BNM, during my time as a finance secretary at the finance department,” Hadenan said as he read from his statement.

“I never discussed with then prime minister on the forex losses suffered by BNM.”

10am: Azman reiterated that dealers only dealt with chief dealers and Nor Mohamed. When conducting officer K. Pushpanathan asked Azman what he thought of Nor Mohamed’s statement yesterday that dealers only reported to chief dealers, and not to him, Azman replied, “Put him here next to me”.

Conducting officer Tajuddin Atan then asked Azman if there were any attempt to report losses in trading.

Azman: If we were to report, we report to the deputy governor or governor.

Tajuddin: Is it the culture in BNM where people behave in that manner? Was there fear that didn’t permit you in BNM to venture outside your comfort zone?

Azman: We were new in the bank, we tried to do our best… we were honoured to serve for the bank.

Saifuddin: BNM losses happened in 1991 to 1993. Three years. No check and balance for each year? There would not have been losses in 1991 and 1993 if there was a check and balance in 1991?

Azman: None.

When panel member Kamaludin Mohamad Said asked Azman what were the total losses, he replied, “Looking at the outstanding position, I can say the loss was huge”.

9.47am: Conducting officer Saw Choo Boon asked Azman how the volume of trades had escalated to “such huge amounts”.

Azman: Initially it wasn’t large. It got bigger and bigger as time goes by. We were not making money.

Saw: BNM trading attracted a lot of attention, in your days as a trader, did you receive any visits from important people, such as VIP or PM?

Azman: We keep to ourselves. We don’t socialise. I don’t recall any visit.

9.30am: After declining to give an estimate to the volume of daily trades, conducting officer Saifuddin Hashim Musaimi pressed further by asking Azman if the daily trades amounted to more than US$1 billion, to which Azman replied “Yes”.

9.05am: First witness Azman Mat Ali, then director of BNM’s currency management and operations department, is called to the stand.

He said he received instructions from either the chief dealer or Nor Mohamed on the buying and selling of foreign currency.

“I don’t remember the highest transaction I’ve reached in a day, but (it) could reach up to a few billion dollars.

“I did not dare to do foreign currency exchange without instructions from chief dealer or Nor Mohamed,” said Azman, who was a forex dealer from 1998 to 1998.

9.00am: Court begins. – September 7, 2017.