Lawyer: No evidence cabinet was misled over forex losses

Mohamed-Haniff-Khatri-Abdulla-bnm-forex-losses-1PETALING JAYA: Prime Minister Najib Razak should have appeared before the Royal Commission of Inquiry (RCI) to show that as a former cabinet member he was misled over Bank Negara Malaysia’s (BNM) foreign exchange (forex) trading losses in the early 1990s.

Lawyer Mohamed Haniff Khatri Abdulla said as the then defence minister, Najib should have bravely testified on the allegation that he was supposedly misled by Anwar Ibrahim, who was the finance minister at the time.

Haniff said without the prime minister’s testimony, the RCI had absolutely no material evidence to come to any conclusion that the then cabinet had been misled.

“This RCI could put forward to His Majesty Yang diPertuan Agong that the public, the parliament and the cabinet were never misled at all with regard to the contents of BNM’s Audited Reports for the period of 1992 to 1994,” Haniff said in his written submission to the tribunal.

Haniff, who represented Dr Mahathir Mohamad, said the RCI could then conclude that there was no necessity to take any action against any individual or institution pertaining to this issue.

Mahathir, who was the prime minister during the same period, left office in 2003, after 22 years at the helm.

Najib was in Mahathir’s cabinet from 1985 to 2003 while Anwar was finance minister from 1991 to 1998.

Haniff said RCI chairman Mohd Sidek Hassan appeared to have had access to classified papers and had also insinuated that Mahathir and Anwar had misled the cabinet in 1993.

“As a matter of fairness, the RCI was duty bound to ensure at least one of the ministers who attended cabinet meetings appeared as a witness to testify that they were so misled,” he said.

Haniff also said former BNM governor Zeti Akhtar Abdul Aziz had testified that necessary measures required to check on forex trading losses had been implemented since 1994.

According to Haniff, the RCI was set up by the government and that the king merely gave consent as required under the law.

“The actual party who decided and wanted the setting up of this RCI with the framed terms of reference is the government of Malaysia,” he said.

Speaking for his client Mahathir, Haniff said it had been established with irrefutable facts that Najib set up the RCI with the dishonest intention of discrediting him (Mahathir), due to the former prime minister’s criticism of the 1MDB scandal.

“The setting up of this RCI is for Najib to divert the attention of the public from the tainted image of his government before the next general election.

“Therefore, any unwarranted insinuation against Mahathir in the absence of any evidence, would be tantamount to bad faith in furtherance of the intent and wishes of Najib,” Haniff said.

The RCI is scheduled to deliver its report to the king and government on Oct 13.

The RCI was set up on July 1 amid claims and denials over Mahathir’s involvement in the scandal, which saw billions of ringgit worth of losses by the central bank.

Sidek, who is a former chief secretary to the government, also headed the special task force which was set up on Feb 15, and later recommended the RCI to be established.

The RCI was tasked with getting to the bottom of the forex losses of US$10 billion (about RM25 billion based on the exchange rate at the time) incurred by the central bank between 1991 and 1993.

The RCI was set up with the following terms of reference:

  • Determine the authenticity of the allegation on the foreign exchange losses suffered by BNM in the 1990s and its implications on the national economy;
  • Determine whether BNM’s involvement in the foreign exchange activities which caused the losses contradicted with the Central Bank Ordinance 1958 or any relevant laws;
  • Determine whether there were elements of hidden facts and information relating to foreign exchange losses suffered by BNM and misleading statements given to the cabinet, parliament and the public;
  • Recommend suitable actions to be the taken against those found to be directly and/or indirectly involved in causing the losses and hiding the facts and information on the losses, and;
  • Recommend appropriate measures to ensure the incident will not recur.

Anwar questions RCI on BNM forex losses

Mahathir’s lawyer demands RCI head retract forex losses comment

Court dismisses Mahathir’s bid against RCI on forex losses

What difference would RCI on forex trading losses make?