BNM RCI Wraps Up with Former AG Unable to Testify Due to Memory Loss

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The last witness was not able to testify today, while some heated exchanges took place between the RCI panel and witnesses yesterday.

Rizal Ishak, the son of former auditor-general Ishak Tadin, informed the panel that his father’s memory and thinking skills have been impaired and would not be able to remember key events relevant to the inquiry.

Khairul Azry Bidin/NST

“My father started having cognitive impairment sometime in 2007. As a result, he is unable to recall memories.

“In fact, in his head he is still 70 years old, when he is already 85,” Rezal told the RCI.

RCI’s conducting officer Suhaimi Ibrahim asked Rezal to produce medical reports to verify his father’s condition to the panel, to which the latter agreed.

Mahathir never interfered in BNM

Yesterday, Dr Mahathir Mohamad, who was the 24th witness, told the RCI that BNM conducted its operations freely and that he never interfered in its affairs or administration during his tenure as the fourth prime minister.

“I believe I did not have the legal powers to interfere in the bank’s policy, affairs and administration,” said Mahathir, who calmly and clearly read a written statement.

Lim Huey Teng/Malaysiakini

He added that he was not informed about the bank’s detailed daily forex transactions as BNM did not have a legal obligation to report to him.

“Our conversations were general chats without any details into the bank’s activity,” he said, referring to former Bank Negara governor Jaffar Hussein.

“At that time, without my knowledge, Jaffar made the decision for Bank Negara to actively participate in forex trading to balance the currency’s volatility and to protect the country’s economy and reserves,” he said.

Although he only found out about this later, Mahathir said he accepted the reason why it was done.

Mahathir denies Anwar, Clifford Herbert’s claims

The former premier claimed that he was only briefed in detail about BNM’s forex trading losses months after the matter was tabled to the Cabinet in 1993.

Anwar and Herbert had both previously testified that Mahathir had been briefed before Anwar had tabled a report on the losses to the Cabinet.

Mahathir went on to say that he was only informed of losses amounting to some RM5.7 billion back in 1993, but had no recollection of the alleged losses of RM31 billion as claimed by former BNM assistant governor Datuk Abdul Murad Khalid.

He then addressed Herbert’s testimony which stated that he (Mahathir) had said “sometimes we make profits and sometimes we make losses” when briefed of the losses.

“I do not remember exactly what I said, but I might have said that or I might have said ‘sometimes we win, sometimes we lose’.

I only said this because Jaffar Hussein had already told me of BNM’s forex trading which had in the late 1980s made profits and supplemented the central bank’s reserves.”

Conducting Officer Suhaimi Ibrahim suggested that Mahathir was a perfectionist and meticulous person who would pay great attention to a problem, yet he had failed to pay attention to the huge losses suffered by BNM.

In response, Mahathir said: “If you want to say that I am a perfectionist, yes I admit, but I am also human, sometimes I overlooked (something).”

“No matter how careful I am in handling everything, there are things I had overlooked. 

For example, I appointed the wrong person,” Mahathir said without naming the person.

RCI panel member Kamaludin Md Said asked Mahathir whether he had wrongly appointed the then Finance Minister, to which he answered: “He seemed nice at first, but what he had in mind, I didn’t know.”

Mahathir also took a swipe at Prime Minister Najib Abdul Razak, claiming that the formation of the RCI was to pressure him, Anwar Ibrahim and critics of the 1MDB scandal.

“In other words, the government is trying to deflect the rakyat’s attention from the negative image faced by Najib’s kleptocratic leadership which has become a laughing stock in the whole world.”

Mahathir said his claim was based on chronological facts which had served as a basis for asking the Yang Di-Pertuan Agong to form the RCI.

Daim did not know about BNM’s forex trading or losses

Earlier, Daim Zainuddin, who was finance minister between 1984 and 1991, claimed the first time he learnt about BNM’s forex losses and profit was when he was shown a document titled ‘Accounting Treatment of Losses Arising from Active Reserve Management 1988-1994’ dated April 18, 2007.

“I did not know that BNM was actively involved in forex trading starting 1988 and the trading amount was significant,” he said, while reading his written statement.

Daim claimed he also did not know who was responsible for forex trading at the central bank between 1984 and 1991.

“Nobody from BNM informed or briefed me about the forex trading. I did not know nor was I informed about the losses,” Daim added.

RCI panel chairman Mohd Sidek Hassan said he found it incredible BNM did not inform the former finance minister about such important matters.

Daim, however, maintained it was the bank’s responsibility to do so. “They must inform me. We have other things to do. They should be responsible enough to keep me informed,” he said.

Pressed by Sidek on why he did not know what was going on in the central bank, Daim kept repeating that he simply was not informed.

“If I knew these things, there’s no way I would have allowed it to happen. I would have sacked them. But I do not know how to act. There needs to be logic in your thinking,” Daim said.

Sidek replied: “The illogical part, Tun (Daim), is that everyone seems to know, and you do not know. With respect, Tun, the Official Secrets Act is to protect information on the people who are supposed to know. In this case, you are supposed to know.”

Other panel members said Daim, as the then finance minister, was obliged to have known about BNM’s forex dealings as the law governing the central bank required it.

“If they chose not to inform me, what could I do?” Daim said.

He added that as finance minister, he had to oversee many things.

Sidek said while he did not expect the finance minister to know everything, something as significant as forex trading losses, which impacted the nation, should not have escaped Daim’s attention.

He added that he found it odd that other lower-ranking officials, citing former senior auditor P Kanason Pothinker as an example, had known about the forex losses, and yet, Daim had not.

“And you, as a minister who was so good, didn’t know. I find that so odd. Don’t you agree?” said Sidek.

Daim replied: “How can I agree or disagree when I wasn’t informed?”

Daim says BNM’s forex trading “rubbish”

When speaking to reporters later, Daim decribed BNM’s forex trading in the 1990s as “rubbish”.

“It’s rubbish. That’s not their (BNM’s) role. Their role is to protect our currency and reserves,” Daim said.

“If I knew I would have stopped it,” he added.

Earlier, former Finance Ministry Deputy Finance Secretary, Datuk Othman Jusoff, testified that share transfers from Telekom Malaysia Bhd and Tenaga Nasional Bhd (TNB) to BNM to bail the latter out of insolvency in 1994 was done “discreetly.”

Former deputy prime minister Muhyiddin Yassin was also present yesterday in the courtroom to listen to the proceedings.

Today’s hearing concludes the RCI into Bank Negara’s currency trading losses after nine days. A total of 24 witnesses testified and 42 documents were submitted.


Earlier reports:

Sept 8, Anwar’s Testimony at Bank Negara’s RCI Proceeding

Sept 7, Zeti and Nor Mohamed Testify at Bank Negara RCI Proceedings

Aug 25, Day 2 RCI on BNM Forex Scandal