Bank Negara 'lost billions in US$, not RM'

Mr Murad largely disappeared from the public eye after he resigned from the Malaysian central bank in 1999.
Mr Murad largely disappeared from the public eye after he resigned from the Malaysian central bank in 1999.PHOTO: NEW STRAITS TIMES

No probe into forex losses under Mahathir's watch, says official at Malaysian central bank in 1990s

KUALA LUMPUR • A former assistant governor at Bank Negara Malaysia (BNM) has claimed that the central bank lost billions of dollars in the early 1990s when Tun Dr Mahathir Mohamad was prime minister, but there was no investigation to find out who was responsible.

Datuk Abdul Murad Khalid made an explosive claim, saying the foreign exchange losses were far higher than reported and were in US dollars, and not the RM9 billion that was publicly reported.

"The total losses were US$10 billion and not ringgit... Our losses are in foreign currencies and not ringgit," he claimed in an interview published yesterday in the New Straits Times and Utusan Malaysia, two newspapers linked to the ruling party Umno.

"There was no control... The most important thing is that there was no investigation at all," Mr Murad was quoted as saying by NST.

The central bank's forex losses in 1991 made international headlines at the time, forcing the resignation of BNM's governor Jaffar Hussein.


The most important thing is there was no investigation at all. 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 came to investigate.


In response to Mr Murad's claims, BNM said it has moved forward to be a stronger and more transparent and accountable financial and regulatory institution since the forex losses of nearly 25 years ago.

The claims come as Dr Mahathir, who was prime minister between 1981 and 2003, leads the opposition against Prime Minister Najib Razak, who is accused by him of embezzling billions of dollars from state fund 1Malaysia Development Berhad (1MDB).

The disclosures also come on the heels of Malaysian media reports earlier this week that recently declassified documents from the US Central Intelligence Agency (CIA) had linked the Mahathir administration to some US$1 billion in losses from bad loans made by government-owned Bumiputera Malaysia Finance (BMF) in the late 1980s to a Hong Kong property group.

Mr Murad, 64, largely disappeared from the public eye after he resigned from the central bank in 1999, following the turmoil caused by the Asian financial crisis and the sacking in September 1998 of then Deputy Prime Minister and Finance Minister Anwar Ibrahim, who is now an opposition leader.

Mr Murad said the authorities should reopen investigations into the BNM case. "They should and I'm willing to cooperate. The records are more than 20 years old and might have been eaten by termites... The dealings were done here."

Mr Murad said he believed the central bank incurred the forex losses from 1991 to 1993.

"I'm not sure (if) Anwar (Ibrahim) was involved... I was not involved in the top management (meetings) between the minister and governor. I didn't know what happened."

Asked if the prime minister knew about the losses, he replied: "I'm sure the governor briefed them."

Meanwhile, the CIA report states: "Circumstantial evidence suggests that the scandal extends into the Mahathir administration. As a government-owned bank, Bank Bumi is closely monitored by both the Finance Ministry and Central Bank and no important decisions are made without their agreement of knowledge."

Dr Mahathir has denied any involvement, pointing to the CIA report itself which says "no direct links have been established between Mahathir and the corruption at BMF".

He was quoted as saying by the news site: "This thing happened way back in 1981 until 1984. Why are you bringing it up now?

"The purpose is political; maybe some people will benefit from it."

A version of this article appeared in the print edition of The Straits Times on January 28, 2017, with the headline 'Bank Negara 'lost billions in US$, not RM''. Print Edition | Subscribe