MALAYSIA would have had RM100 billion more in its foreign reserves if not for the foreign exchange (forex) losses scandal that happened in the 1990s, former Bank Negara Malaysia (BNM) assistant governor Datuk Abdul Murad Khalid said.
He said the sum would have been accumulated over a 25-year period if not for the forex losses.
“We lost RM4 billion in income annually because of the scandal,” he said.
Murad said that huge sums were lost in the scandal and, hence, it must be investigated by the Royal Commission of Inquiry (RCI).
“The total losses then were US$10 billion, which is equivalent to about RM40 billion today.
“The money would have increased to US$26.66 billion, or more than RM100 billion, if it had been kept in government savings, calculated at four per cent compound interest annually.
“But, all that money has gone down the drain,” he told the New Straits Times yesterday.
Murad said the establishment of an RCI to investigate the losses should not be seen as a political move as it would help the truth prevail.
He said it was never too late to look into the scandal as the matter was kept under wraps back then.
Murad, who left BNM in 1999, added that the RCI would be the best solution in bringing the scandal to a closure as it could call for witnesses to testify under oath.
“The RCI must investigate to see if there are elements of crime in the forex losses,” he said.
In an exclusive interview with the NST earlier this year, Murad said the forex losses had seen the nation’s foreign currency reserves in US dollar, British pound and Japanese yen all “going down the drain”.
“It disappeared just like that… There was no control. No internal control and nobody knew what was happening at that time. The most important thing is that there was no investigation. You lost US$10 billion, but there was no investigation. The police or the Anti-Corruption Agency (now the Malaysian Anti-Corruption Commission) did not come. No one investigated,” he was quoted as saying.
The government last week announced its decision to form an RCI on the matter after a special task force, headed by former chief secretary to the government Tan Sri Mohd Sidek Hassan, presented its report to the cabinet.
The task force had three terms of reference: to conduct an initial probe into how much money was lost; whether actions were taken to hide the real losses; and, based on its preliminary investigations, suggest what further action should be taken, including whether a RCI was needed.
After three months of investigation, the task force found that the total BNM forex losses were “different and higher” than the RM5.7 billion reported to Parliament and the cabinet at the time.
This was based on documents and interviews with parties, including 12 people called up to give their testimony.
The task force, which was formed on March 14 and submitted its report to the government on June 2, said the RCI’s outcome would reveal details of the losses and bring closure to that chapter.
Former deputy prime minister Datuk Seri Anwar Ibrahim, who was also finance minister when the scandal happened, had confirmed that the country lost between RM15 billion and RM30 billion in foreign exchange, which took place during Tun Dr Mahathir Mohamad’s administration.
Anwar, who gave his statement to the task force in April, claimed that the then central bank
governor, the late Tan Sri Jaafar Hussein, had admitted to him that former BNM assistant
governor Tan Sri Nor Mohamed Yakcop was identified as the
officer responsible.
Nor Mohamed was among several individuals, including former BNM governor Tan Sri Dr Zeti Akhtar Aziz, DAP adviser and Gelang Patah member of parliament Lim Kit Siang, whom the task force called up as part of its investigations.