THE much-awaited testimony of former Bank Negara Malaysia (BNM) assistant governor Datuk Abdul Murad Khalid on the central bank’s US$10 billion foreign exchange (forex) scandal will take place tomorrow.
Murad’s testimony follows his disclosure to this newspaper in January that prompted the government to open — for the first time — the investigation into the unresolved case of the huge BNM losses.
The Royal Commission of Inquiry (RCI) on BNM’s forex losses in the 1990s tomorrow will hear first-hand from Murad on the secretive dealings then of the central bank’s forex operations.
The forex operations in the early 1990s, which were kept secret even from the then BNM governor the late Tan Sri Jaafar Hussein, has turned out to be Malaysia’s, if not the world’s, biggest forex scandal.
Murad will tell the RCI that no proper investigations had been conducted since Tun Dr Mahathir Mohamad’s era despite the huge losses that nearly broke the central bank.
In an exclusive interview with the New Straits Times on Jan 27, Murad had claimed that the forex losses had seen the nation’s foreign currency reserves in US dollar, British pound and Japanese yen all “going down the drain”.
Murad, who left BNM in 1999, had said no one was ever investigated, or charged for what he described as the biggest forex losses in the world.
“It disappeared just like that. There was no control. No internal control and nobody knew what was happening at that time.
“The most important thing is that there was no investigation. You lost US$10 billion, but there was no investigation.
“The police or the Anti-Corruption Agency (now the Malaysian Anti-Corruption Commission) did not come. No one investigated,” he was quoted as saying.
At the time, Dr Mahathir was the prime minister, Datuk Seri Anwar Ibrahim was the finance minister while Tan Sri Nor Mohamed Yakcop was BNM assistant governor handling the forex trading.
The RCI on BNM’s forex losses kicked off its first session on Aug 8, where its terms of reference were laid out.
The first session saw the RCI, led by Petronas chairman Tan Sri Mohd Sidek Hassan as its chairman, rejecting an attempt by Dr Mahathir to recuse two of the panel’s five members.
The two members were Sidek and Special Task Force to Facilitate Business (Pemudah) co-chairman Tan Sri Saw Choo Boon.
Counsel Mohamed Haniff Khatri Abdulla, who held a watching brief for Dr Mahathir, made the application to recuse Sidek and Saw, arguing that they were earlier involved in the Special Task Force formed by the government on March 14 to investigate the case, and eventually, recommended the RCI on June 2 when submitting its findings to the government.
Dr Mahathir subsequently filed a judicial review to stop Sidek and Saw from being part of the commission, but was rejected by the Court of Appeal citing public interest last Friday.
In another exclusive interview with the NST on June 28, Murad said Malaysia would have had RM100 billion more in its foreign reserves if not for the forex losses.
“We lost RM4 billion in income annually because of the scandal,” he was quoted as saying and that the RM100 billion would have been accumulated over a 25-year period if not for the losses.
Based on the recommendations by the Special Task Force headed by Sidek, the Prime Minister’s Office announced on
June 21 that a RCI would be formed.
Other panel members are High Court judge Datuk Wira Kamaludin Md Said, Bursa Malaysia Bhd chief executive officer Datuk Seri Tajuddin Atan and Malaysian Institute of Accountants member K. Pushpanathan.
Finance Ministry Strategic Investment Division director Datuk Dr Yusof Ismail is the commission’s secretary.