Daim: Onus was on Bank Negara to tell me about forex trading

The onus was solely on Bank Negara to inform the government on its foreign exchange (forex) trading activities,  former finance minister Daim Zainuddin said today.

He said restrictions under the Official Secrets Act 1972 (OSA) meant only the Bank Negara governor could have told him about the central bank's forex trading when he was finance minister, and at the time even the auditor-general, who reported to him, did not inform him that something was amiss.

“Everything you can see now was under the OSA. The fact it is under the OSA means they don’t want people to know.

“Of course, they said OSA means I should know; OSA means anybody who knows will be charged,” Daim told reporters in Putrajaya after testifying before the Royal Commission of Inquiry (RCI) into Bank Negara’s forex losses three decades ago.

Daim, who was finance minister from 1984 until 1991,  testified earlier today that Bank Negara became active in forex trading in 1988, but he was unaware of it at the time.

Asked whether OSA’s restrictions also applied to him, he said, “Sure. It depends on the (Bank Negara) governor if he wants to share or not. If it is under OSA, nobody is supposed to know.”

He reiterated if he had known about Bank Negara’s forex activities, he would have put a stop to it.

'Even auditor-general didn't tell me'

This, he said, was because Bank Negara was supposed to protect the ringgit and Malaysia’s reserves, and it would be illegal for the central bank to trade in the forex market for profit.

“Even the auditor-general didn’t tell me and he is an officer under me. They didn’t even tell me; when they’ve got this, they must come and see me.

“Everybody must be responsible to the country. If you see something wrong, why didn’t you come and report to me?” he said.

To a question, Daim conceded that had been widespread news reports that Bank Negara had been engaging in forex trading.

However, he pointed out, the central bank had consistently denied the reports.

“They said they were defending the currency, so you’d have to accept that. You’ve put people in charge, and they do not do their work until later, when you’ve found out. If you knew, you would have taken action,” he said.

Asked whether the government should have investigated further, Daim said he could not remember what he had done, but said he would have directed one of his officers to make inquiries and the officer would have reported back that all was well.

“Could I have done more? Yes, as I’ve said: It’s an old story. We are all smarter now,” he added. -Mkini