Yang di-Pertuan Agong Sultan Muhammad V received a report on the loss of Bank Negara Malaysia (BNM) from the Chairman of the Royal Commission of Inquiry (RCI), Tan Sri Mohd Sidek Hassan (two, left) at Istana Negara today. (BERNAMA)

KUALA LUMPUR: The Royal Commission of Inquiry (RCI) into the Bank Negara Malaysia (BNM) foreign exchange (forex) trading scandal of the 1990s presented its findings and recommendations to the Yang di-Pertuan Agong today.

“We have already presented our findings to the Agong, along with our recommendations and it is now up to His Majesty to take the next step,"said RCI chairman Tan Sri Sidek Hassan to selected media after his seating with the Agong.

Sidek declined to reveal details on the findings or the specifics of the panel’s recommendations, but stressed they were within the RCI’s terms of reference.

The RCI was established to probe into the forex trading losses amounting to RM31.5 billion, which took place between 1985 to 1993, during the administration of then-Prime Minister Tun Dr Mahathir Mohamad.

The RCI proceedings were concluded on Sept 19, two days earlier than expected.

During this time, 42 documents were presented and the testimonies of 25 witnesses were recorded.

Those called include Dr Mahathir, former Finance Ministers Datuk Seri Anwar Ibrahim and Tun Daim Zainuddin.

Former deputy governor Tan Sri Lin Sin Yan, former BNM assistant governor Datuk Abdul Murad Khalid as well former BNM adviser Tan Sri Nor Mohamed Yakcop were also heard by the panel.

Sidek, who is also chairman of national oil firm Petroliam Nasional Bhd was assisted by High Court judge Datuk Kamaludin Md Said, Bursa Malaysia chief executive officer Datuk Seri Tajuddin Atan, Special Task Force to Facilitate Business (Pemudah) co-chairman Tan Sri Saw Choo Boon and Malaysian Institute of Accountants member K. Puspanathan during the proceedings.

The commission’s secretary was Datuk Dr Yusof Ismail. He is the Finance Ministry’s strategic investment division director. They were also present during the audience.

A key witness in the proceedings was BNM assistant governor Datuk Abdul Murad Khalid. He had claimed Anwar had known about the losses as the former had briefed him while on a flight to Hawaii in 1994.

Murad had also claimed that the latter had remarked that should word of the losses be made public, he would have to step down as finance minister.

He also testified that he had informed then-BNM governor Tan Sri Jaffar Hussein about the losses in 1992 but was “scolded” as his boss did not believe him.

Murad later claimed that there was ‘no check and balance system’ in the BNM foreign exchange trading then, and despite a prohibition on transactions that were speculative in nature under the Central Bank of Malaysia Ordinance 1958, the trading done in the 1980s until 1993 was speculative and a form of gambling.

Murad had further alleged that the losses were the “biggest scandal in world banking history”, and claimed that the cover-up had to be done to protect BNM’s image and that of the Malaysian government.

The commission’s terms of reference were:

* to determine the veracity of the allegation surrounding the forex losses incurred by BNM and its implications on the national economy;

* to determine if the involvement of BNM in forex activities which resulted in losses contravened the Central Bank Ordinance 1958 or other related laws;

* to determine if there were elements to conceal facts and information regarding this as well as the issuance of statements which misled the cabinet, Parliament and public; and

* to recommend actions to be taken against anyone found to have been involved and steps to ensure such an incident does not recur.

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