KL sets up task force to probe 1990s forex losses

KUALA LUMPUR • The Malaysian Cabinet has appointed the former chief secretary to the government, Mr Mohd Sidek Hassan, to head a special task force to probe foreign exchange (forex) losses suffered by Bank Negara Malaysia (BNM) in the 1990s under then Premier Mahathir Mohamad.

The probe is seen as a counter-attack by Prime Minister Najib Razak against Tun Dr Mahathir, who has been the biggest critic of the current premier for the financial scandal involving state fund 1Malaysia Development Berhad (1MDB).

The task force will conduct preliminary investigations into the forex losses and study if there had been any cover-up or deliberate act of giving misleading statements about the foreign currency transactions at Parliament meetings, the Prime Minister's Office said on Wednesday in a statement that was reported in The Star newspaper.

"The establishment of the terms of reference is important as the first step in getting the relevant facts, including analysing the official parliamentary meeting reports, minutes of Cabinet meetings, Auditor-General's report and others," the statement added.

The forex losses reported in 1991 caused by currency speculation in financial markets forced the resignation of BNM's governor Jaffar Hussein. A former BNM assistant governor, Datuk Abdul Murad Khalid, had claimed in an interview in January that some RM44 billion (S$14 billion) was lost then, and not the RM9 billion publicly reported.

Dr Mahathir, who was prime minister between 1981 and 2003, leads the opposition against Datuk Seri Najib.

More than US$1 billion (S$1.4 billion) was deposited in Mr Najib's personal bank accounts in 2013, the Wall Street Journal reported in March last year.

Dr Mahathir said he welcomes probes into both the forex losses and 1MDB. "Certainly at no time did I have billions of ringgit in my private account," he wrote in his blog.

A version of this article appeared in the print edition of The Straits Times on February 24, 2017, with the headline 'KL sets up task force to probe 1990s forex losses'. Print Edition | Subscribe