RCI recommends Dr M and Anwar be probed, claims Daim abetted CBT

FOREX RCI | The Royal Commission of Inquiry (RCI) into Bank Negara's foreign exchange (forex) losses has recommended that an investigation is carried out to determine if former premier Dr Mahathir Mohamad and his deputy Anwar Ibrahim had concealed facts from the cabinet.

According to the commission's report released this afternoon, the pair had likely abetted Nor Mohamed Yakcop and hid certain facts from the cabinet. Both are grave offences under the Penal Code.

Nor Mohamed was in charge of several portfolios in Bank Negara at the time, including the management of external reserves.

The RCI had recommended that Nor Mohamed is investigated for criminal breach of trust (CBT) and for contravening the Central Bank Ordinance 1958.

The commission also accused former finance minister Daim Zainuddin of abetting Nor Mohamed in committing CBT. Daim was finance minister until 1991 before he was replaced by Anwar.

Relative to what was written in the report about Mahathir and Anwar, the RCI’s account of Daim’s involvement in the affair appears limited.

Anwar 'well informed', Dr M's testimony 'questionable'

The RCI also said Mahathir and Anwar were aware of the extent of Bank Negara's losses in the foreign exchange markets in the early 1990s.

The commission said Anwar, who was also finance minister at the time and had oversight of Bank Negara's activities, was “well informed” about the losses and the measures taken to conceal it from Bank Negara's annual accounts.

“There is no record from the minutes of the cabinet meetings that IW21 (Anwar) had briefed the cabinet on the actual losses and the measures used to conceal the losses in Bank Negara's annual accounts.

“The prime minister (IW24, Mahathir) chaired the cabinet meeting on April 6, 1994, where a real loss of only RM5.7 billion was announced.

“IW24 (Mahathir) was briefed by IW21 (Anwar) and IW14 (former Treasury chief secretary Clifford Francis Herbert) that the total loss incurred from the forex dealings from 1992 to 1993 could be in the range of about RM30 billion,” read the report.

The briefing was said to have taken place in “late 1993”.

Taking into account that both Anwar and Herbert were “very consistent” in their testimonies that they found the forex losses to be about RM30 billion, the RCI said Mahathir's testimony, where he claimed ignorance over the losses, was “questionable”.

In his testimony, Mahathir had stated that he did not remember RM30 billion being mentioned.

“What I remember was that a figure of around RM5 billion was mentioned,” the report quoted the former premier as stating during his testimony.

The RCI had established that Bank Negara had lost RM31.5 billion through forex trading between 1992 and 1994, primarily through the alleged actions of Nor Mohamed Yakcop.

The commission also recommended criminal investigations on “several persons” from Bank Negara, the Finance Ministry, Auditor-General's Department, including Bank Negara's board of directors and Anwar for concealing information regarding the losses.

Ex-governor and deputy’s role

As for the Bank Negara governor Jaafar Hussein, who passed away in 1998, the RCI said he might have known or been told of the forex losses but refused to believe it.

“By putting too much trust on (Nor Mohamed) and delaying in taking action when he first knew or heard reports of the losses, the late governor appeared to have abetted (Nor Mohamed's) CBT,” read the report.

The RCI said Jaafar's then deputy Lin See Yan appeared to have omitted actively questioning and monitoring Nor Mohamed and therefore abetted the latter in committing criminal breach of trust.

“A formal investigation to prove or disprove this opinion is recommended,” read the report.

The RCI said Bank Negara's board of directors at the material time must also bear “some” responsibility for Nor Mohamed's possible criminal breach of trust.

According to the commission, Nor Mohamed had briefed the board twice on the forex losses. No recommendation for action was made by the RCI.

The RCI, initiated by the Najib administration, commenced its inquiry in July. The five-member panel comprised Mohd Sidek Hassan (chairperson), Justice Kamaludin Md Said, Tajuddin Atan, Saw Choo Boon and SAK Pushpanathan.- Mkini