Malaysia's Anwar accused by probe panel of hiding actual forex losses from Cabinet

Malaysia's former finance minister Anwar Ibrahim was yesterday accused of hiding from the Cabinet the true extent of foreign exchange losses by the central bank in the 1990s.
Malaysia's former finance minister Anwar Ibrahim was yesterday accused of hiding from the Cabinet the true extent of foreign exchange losses by the central bank in the 1990s. PHOTO: REUTERS

PUTRAJAYA - Malaysia's former finance minister Anwar Ibrahim was on Thursday (Sept 7) accused of hiding from the Cabinet the true extent of foreign exchange losses by the central bank in the 1990s, in a heated testimony at a government-backed inquiry.

The accusation was made by the chairman of the Royal Commission of Inquiry (RCI) Mohd Sidek Hassan as Anwar, who is now an opposition leader and is serving jail time for sodomy, made an appearance at the probe under heavy police guard.

"You knew it. You knew it. And you chose not to disclose it," Tan Sri Sidek said.

Mr Anwar's response: "Don't politicise this."

Mr Sidek, basing his accusation on past minutes of meetings, said the Cabinet was informed by Anwar that the losses totalled RM5.7 billion in 1993.

Anwar said the figure that he told the Cabinet, led then by prime minister Tun Mahathir Mohamad, was based on discussions with Bank Negara. Dr Mahathir attended the inquiry on Thursday as Anwar was giving his testimony.

The RCI was formed on July 1 to uncover facts behind massive losses notched by Bank Negara Malaysia (BNM) in its aggressive forex trading more than two decades ago. Critics say it was a government move to smear Dr Mahathir, who is now an opposition leader. BNM between 1988 and 1994 took up huge positions in the international forex market that led to the losses.

The commission determined in its first sitting that the total loss was RM31.5 billion.

Former central bank governor Ms Zeti Akhtar Aziz on Wednesday told the commission that she found out in 2007 that BNM had lost RM32 billion during the episode.

Prior to the RCI's formation, the total sum reported by BNM on forex losses between 1991 and 1993 was RM9.3 billion.

Tun Daim Zainuddin was finance minister between 1984 and 1991, and was replaced by Anwar from March 1991.

All eyes were on Mr Anwar on Thursday as he was the first witness in the proceeding who came without a prepared statement. More than a dozen others had testified.

Anwar said that he was "duty bound" to report the figures published by the central bank. He said the numbers which were published in BNM's annual reports were approved by the auditor-general. He said that he knew about the losses by March 1993.

Mr Sidek said to Anwar: "As a whole, the cabinet was not informed of the actual losses. There were losses and you were the finance minister at that time managing the country's economy."

Mr Anwar replied: "To accuse me of misleading the Cabinet is unfair."

The commission has yet to call on Dr Mahathir as a witness, despite the latter's open declaration that he would willingly testify.

Other witnesses who testified on Thursday included a former forex dealer, Azman Ali, who said all dealers received instructions from chief dealer and Nor Mohamed Yakcop, then a banking manager at BNM, before placing trades.

Tan Sri Nor Mohamed told the commission on Wednesday that he never personally executed any trade, and could not recall the highest forex transaction done in a day or a month.

Mr Azman said that at least US$1 billion were traded in a day on the instructions of Mr Nor Mohamed or the chief dealer.

RCI panel member K. Pushpanathan asked Mr Azman what he thought of Mr Nor Mohamed's statement that the dealers only reported to the chief dealer, and not to Mr Nor Mohamed. Mr Azman's reply: "Put him here next to me."

The next RCI hearing is on Sept 18.