KL forex losses: Panel rejects claims of bias

Inquiry members disagree with Mahathir and Anwar over possible conflict of interest

The Royal Commission of Inquiry (RCI) into billions lost by Malaysia's central bank in a 1990s foreign exchange scandal began controversially yesterday, as former premier Mahathir Mohamad and his then deputy Anwar Ibrahim claimed the chairman and another panellist should recuse themselves under the rules of natural justice.

But the five commissioners disagreed that chairman Mohd Sidek Hassan and former Federation of Malaysian Manufacturers president Saw Choo Boon were in positions of conflict for being members of the Special Task Force (STF) that recommended the establishment of the RCI to the Cabinet.

Tun Dr Mahathir's counsel Haniff Khatri Abdulla cited a previous court ruling declaring that even investigators must be bound by rules of natural justice, not just judges, and pointed out that the RCI's findings can lead to both criminal and civil court cases.

"Absolutely, rules of justice must govern this commission. The whole point is to find justice. The public has to have confidence that the commission is conducting the terms of reference fairly and justly," he argued.

"The purpose served by the STF is due to a personal rift between Datuk Seri Najib Razak as Prime Minister and Dr Mahathir," he added, referring to how the duo have traded barbs since Dr Mahathir called on his successor to step down.

Dr Mahathir and Anwar, who were former enemies, are now leaders in the opposition Pakatan Harapan alliance.

Mr Sivarasa Rasiah, representing jailed politician Anwar, also pointed out that the Prime Minister's Office clearly stated that the STF found there was a prima facie case and recommended that the RCI look into the forex losses. "Should they participate in the commission to investigate, when they have already formed a conclusion?" he said.

But Mr Mohd Sidek dismissed the concern, saying "the commission has been constituted and consented by the Yang di-Pertuan Agong and therefore we have made the decision that it shall continue".

However, the commissioners allowed the lawyers on watching brief for the duo to play an active role in the inquiry, as long as their interventions were strictly within the panel's terms of reference.

After the ruling, Mr Haniff said Dr Mahathir's legal team would likely file a judicial review to quash the panel's decision before the RCI resumes on Aug 21. Mr Sivarasa said Anwar would likely decide on the same course of action, but he would have to consult his client first.

The inquiry stemmed from claims by former Bank Negara Malaysia assistant governor Abdul Murad Khalid in January that the central bank suffered foreign exchange losses of up to US$10 billion (S$13.8 billion) in the 1990s, far more than the RM9 billion (S$2.9 billion) loss that was publicly reported at the time.

The inquiry is scheduled to continue over 10 days up to Sept 21, with its report to be submitted within three months from July 15, the date it was established.

The other members of the panel are High Court judge Kamaludin Md Said, Bursa Malaysia chief executive Tajuddin Atan and Malaysian Institute of Accountants member Pushpanathan Kanagarayar.

A version of this article appeared in the print edition of The Straits Times on August 09, 2017, with the headline 'KL forex losses: Panel rejects claims of bias'. Print Edition | Subscribe