Anwar’s Testimony at Bank Negara’s RCI Proceeding

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Anwar and tribunal chairman in heated debate on the Cabinet’s knowledge of forex losses.

  • Mahathir makes second appearance at RCI
  • Agrees with Anwar’s decision on going with audited figures
  • Anwar’s testimony:

– Nor Mohamed failed to give accurate report on forex losses

– Mahathir did not give any instruction to stop or proceed with forex trading

– He ordered BNM to stop its forex trading immediately

– Cabinet knew of forex losses, based on BNM’s audited report

Dr Mahathir Mohamad made another appearance yesterday at the Royal Commission of Inquiry (RCI) into Bank Negara Malaysia’s (BNM) foreign exchange (forex) trading losses in the 1990s. He first came to the RCI hearing on Aug 24.

He arrived at the Palace of Justice in Putrajaya at 2.15pm and left at 4.15pm.

Meanwhile, Anwar Ibrahim was inside the proceeding room. He was brought to the court from Sungai Buloh prison at 8.40am, as he was initially scheduled to testify in the morning. However, his session was postponed to later in the afternoon.

His wife, Wan Azizah Wan Ismail was also present in a show of support.

Last week, Anwar had voiced concerns that he would not be called to testify at the RCI.

“I am without question a person who is ‘concerned’ with the proceedings of the Inquiry as provided for under Section 18 of the Commissions of Enquiry Act 1950.

“I need to be there based on the fact that my name has been mentioned a number of times by certain witnesses,” Anwar had said in a statement dated Aug 24.

The alleged scandal occurred during the Mahathir administration and when Daim Zainuddin (1986-1991) and Anwar (1991-1998) were finance ministers.

Unlike the previous 19 witnesses, Anwar gave his testimony without a pre-recorded witness statement, according to his lawyer R Sivarasa.

Nor Mohamed failed to give accurate report on forex losses

Anwar told the RCI that Nor Mohamed Yakcop did not give detailed information on the forex losses incurred by BNM in 1992.

He claimed the former BNM adviser had failed to provide an accurate report on the losses to him and Mahathir.

Then BNM governor Jaffar Hussein told Anwar that he had agreed for Nor Mohamed to tender his resignation due to the losses.

“If he declined to resign, I would have ordered for him to be sacked,” Anwar said.

Nor Mohamed, who testified before the tribunal on Wednesday, said he tendered his resignation in 1994 as he wanted to be accountable for the losses.

According to Anwar, Jaffar said Nor Mohamed had exceeded his mandate in the forex transactions and had not given an accurate report to BNM’s management.

Jaffar had also tendered his resignation as he took responsibility for the losses from 1991 to 1993, which according to earlier witnesses, amounted to RM30.5 billion.

Anwar said the late governor was “quite emotional” when he handed over his resignation, telling him that he fully trusted Nor Mohamed and he humbly apologised for what happened.

Mahathir gave no instructions

Anwar said he had gone with former treasury secretary-general Clifford Francis Herbert to brief Mahathir on the losses but the former premier did not give any instruction on whether to stop or proceed with the forex trading.

Clifford, who testified at the RCI last week, said that Mahathir was “indifferent” when briefed about forex losses, which the former claims could amount to RM30 billion.

Anwar said he then ordered BNM to stop its forex trading immediately.

“I also gave an undertaking in Parliament that such activities would not be repeated,” he said.

Mahathir never entered forex trading room

Earlier, the central bank’s Foreign Exchange Management Department director, Azman Mat Ali, 54, said Mahathir had never entered the bank’s foreign exchange trading room, in replying to a question by Mahathir’s counsel Mohamed Haniff Khatri Abdulla.

He said when he was first transferred to the foreign exchange section as a dealer, his job was to buy and sell forex as directed by the bank’s management.

“I did not remember the specific figure of the transaction but the amount can reach more than US$1bil a day,” he said, adding that apart from reporting to Nor Mohamed and a chief dealer, nobody knew the extent of the forex trading.

Azman said he had carried out the transaction on the instruction of Nor Mohamed.

Cabinet knew of forex losses

Anwar was grilled by the RCI’s tribunal for almost 30 minutes over the lack of information on BNM’s losses provided to the Cabinet.

Tribunal chairman Mohd Sidek Hassan asked Anwar if he was trying to conceal BNM’s forex losses, repeatedly claiming that Anwar failed to reveal the actual losses and that the Cabinet were not aware of the matter.

Anwar stressed that his referral to a final audited BNM report that only declared RM5.7 billion in forex losses in a Cabinet presentation was not equivalent to him concealing information from the Cabinet.

“I take issues with any cabinet minister who says they were not aware of the losses,” ANWAR said.

Choo Choy May/MMO

He kept reiterating that whatever he presented to the Cabinet was based on BNM’s final annual audited financial report which states the losses as RM5.7 billion and which he believed to be true as it had gone through the auditor-general.

Anwar did, however, admit that he knew earlier on that the losses could amount to more than RM12 billion but was “duty-bound” to go by the books that had been established by the central bank.

“I couldn’t be expected to make allegations against BNM. And the Cabinet didn’t ask for my personal opinion.

“They asked me what the report said.

“To say they (then cabinet members) didn’t know about the losses…that’s not true,” said Anwar.

He asked the chairman not to “politicise” the issue, saying the RCI should act with integrity.

He said Sidek should know that the role of a finance minister is to report the statements presented to him.

“We only take the audited reports. Don’t make this case an exception just to target someone.”

If Sidek wanted to question accounting roles, then he should do the same with Felda and state-owned 1MDB, he added.

Mahathir, when met outside the court, said Anwar had done the right thing by going with the audited figures.

“He can’t make assumptions that money was stolen or something.

“He made a statement based on what was confirmed by the auditors,” Mahathir said.

Absurd to call forex losses a “lesson” 

On Wednesday, Nor Mohamed described the forex losses as a “lesson” and said he believed his experience at the forex desk enabled him to help the country weather the 1997/1998 financial crisis.

Responding to this, Anwar said it was unacceptable and absurd to call the forex losses a “lesson”.

“You don’t have to cost the country billions of ringgit in order to learn a lesson.

“Go to business school (for lessons),” Anwar said.

He added that even though the “intentions were right”, the responsible parties “must be accountable” for what had happened.

The hearing continues on Sept 18.