Royal commission recommends criminal probe against Anwar, Mahathir for forex losses

The commission found that Tun Mahathir (left), Malaysia's prime minister from 1981 to 2003, and Anwar, who was finance minister from 1991 to 1998, were involved in Bank Negara Malaysia's (BNM) foreign exchange trading losses of RM31.5 billion.
The commission found that Tun Mahathir (left), Malaysia's prime minister from 1981 to 2003, and Anwar, who was finance minister from 1991 to 1998, were involved in Bank Negara Malaysia's (BNM) foreign exchange trading losses of RM31.5 billion. PHOTOS: EPA-EFE, THE STAR / ASIA NEWS NETWORK

KUALA LUMPUR - An inquiry into foreign exchange losses at Malaysia's central bank in the 1990s has recommended that former prime minister Mahathir Mohamad and jailed opposition leader Anwar Ibrahim be investigated for criminal breach of trust offences.

The findings of the Royal Commission of Inquiry (RCI) were tabled to Parliament on Thursday (Nov 30), but not debated.

The commission found that Tun Mahathir, Malaysia's prime minister from 1981 to 2003, and Anwar, who was finance minister from 1991 to 1998, were involved in Bank Negara Malaysia's (BNM) foreign exchange trading losses of RM31.5 billion (S$10.39 billion).

"The commission is of the view that from the facts and circumstances presented to the Enquiry, there is a basis to recommend that the Polis Diraja Malaysia (Royal Malaysian Police) carry out a formal investigation into possible offences of criminal breach of trust(CBT) and/or cheating that may have been committed by officers of BNM, BNM's Board, the MoF (Finance Ministry), Auditor General's Department, the Minister of Finance and the Prime Minister in carrying out speculative forex dealings and concealing the forex losses from the Cabinet and Parliament," the report said.

The commission also suggested that Dr Mahathir may possess more information than he previously claimed to know, despite having testified as a witness at the inquiry.

"The conclusion that he could have been aware of the actual losses is not without merit ... Despite his denials, the commission is of the opinion that a thorough investigation should be carried out to determine the extent of (Dr Mahathir's) involvement and liability on the matter," it said.

Dr Mahathir had previously told the inquiry that that he did not have direct knowledge of the central bank's trading activities or the losses incurred thereafter.

The commission stated that it could not avoid "the glaring fact that (Anwar) as the finance minister was responsible for misleading (deceiving) the Cabinet and Parliament on the actual forex losses faced by the BNM".

RCI secretary Yusof Ismail lodged a police report at the Putrajaya police headquarters on Thursday afternoon, based on the commission's findings. He told reporters that it was filed as there was a possibility of wrongdoing “by those involved in the forex dealings then”.

Mr Yusof said no names were mentioned in the police report as the details were contained in the RCI findings which was also made available to the police.

“The police will hand over their report to the Attorney-General’s chambers for further action,” he said.

Both Dr Mahathir and Anwar are leaders of political parties within the opposition pact Pakatan Harapan. Opposition leaders on Thursday branded the findings as  “politically motivated”,  and demanded that the report be debated in Parliament.

Meanwhile, the commission also named former BNM adviser Nor Mohamed Yackop as the person who may be chiefly liable for the criminal breach of trust probe, basing it on the evidence it received during the inquiry. Tan Sri Nor Mohamed resigned from his post at the bank in 1994.

The forex losses scandal was among the biggest from Dr Mahathir's time as prime minister, and it led to the resignation of then BNM governor Tan Sri Jaffar Hussein.

During the RCI's eight-day hearing in Aug and Sept, a total of 25 witnesses, including Dr Mahathir, Anwar and former finance minister Daim Zainuddin testified, with 42 documents submitted during the proceedings.

The inquiry stemmed from BNM former assistant governor Abdul Murad Khalid's claims in January that the central bank suffered foreign exchange losses of up to US$10 billion (S$13.6 billion) in the 1990s, far more than the RM9 billion (S$2.9 billion) loss that was publicly reported at the time.