PUTRAJAYA: Bank Negara's foreign exchange (forex) trading losses of the 1990s has to be classified as “deferred expenditures” in its annual financial report as it was getting too big for the Other Reserve accounts to handle.
“Forex losses or gains were typically charged to the Other Reserve account, but in 1993, the losses was getting too big and it can no longer be done and was classified as “deferred expenditures” instead,” said former Bank Negara Accounts Manager, Saleha Lajim during the third proceedings of the Royal Commission of Inquiry (RCI) today.
Saleha, 69, however said that she does not exactly remember the amount of the loss as it happened too long ago. However, she did remember that the loss was too big to be charged to the Other Reserve accounts.
She also shared that then deputy governor, Tan Sri Lee See Yan, had verbally asked her to make some modifications to the 1993 financial reports; of which her department prepared a draft for.
Saleha explained that the modifications consisted of putting the losses in either the Investment Fluctuation Reserve account and/or the Exchange Rate Fluctuation Reserve account, instead of the Other Reserve account.
“I do remember that we presented the draft to Bank Negara Governor Tan Sri Jaafar Hussein by way of his Advisor, who was Tan Sri Nor Mohamed Yakcop. The draft was approved and was kept by the Accounts Department.”
During cross examination, Malaysian Institute of Accountants member K. Puspanathan, who is also an RCI panelist, asked why didn't Saleha, in her capacity as Accounts Manager, raised the alarm when all this was taking place.
Saleha replied that she was just doing as she was told, and nothing more.
The RCI has today entered its third proceedings.
Led by chairman Tan Sri Mohd Sidek Hassan, the five-man panel is tasked with finding the cause of Bank Negara’s forex scandal of 1990s with losses amounting to some RM31 billion. - Additional reporting by ARFA YUNUS