Govt launches in­quiry over forex losses un­der Ma­hathir

Kuwait Times - - BUSINESS -

KUALA LUMPUR: Malaysia’s gov­ern­ment yes­ter­day launched an in­quiry into mas­sive for­eign ex­change losses by the cen­tral bank more than two decades ago, in a probe that could lead to crim­i­nal pros­e­cu­tion for for­mer Prime Min­is­ter Ma­hathir Mohamad. Op­po­si­tion lead­ers slammed the in­quiry as a po­lit­i­cal ploy to dis­credit Ma­hathir just months af­ter he set up a new po­lit­i­cal party. He now leads an op­po­si­tion coali­tion aimed at oust­ing Prime Min­is­ter Na­jib Razak in gen­eral elec­tions due in mid-2018.

Ma­hathir, 92, led the coun­try for 22 years be­fore step­ping down in 2003. He has been spear­head­ing calls for Na­jib to re­sign over a multi­bil­lion-dol­lar fi­nan­cial scan­dal in in­debted state fund 1MDB. The fund is be­ing in­ves­ti­gated in sev­eral coun­tries for money laun­der­ing. Na­jib has de­nied any wrong­do­ing. A five-mem­ber Royal Com­mis­sion of In­quiry, meeting for the first time Tues­day, said it will in­ves­ti­gate how much the cen­tral bank lost in cur­rency trad­ing in the 1990s and de­ter­mine if there was a cover-up.

The in­quiry was set up af­ter the gov­ern­ment said a pre­lim­i­nary in­ves­ti­ga­tion found that the ex­tent of losses was larger than what was re­ported to the cab­i­net and par­lia­ment. The in­quiry panel said a hear­ing will be­gin Aug 21 and that it will aim to sub­mit a re­port to the king by Oct 13. The panel can make rec­om­men­da­tions on ac­tion to be taken against those found guilty, but it is up to the at­tor­ney-gen­eral to prosecute.

Ma­hathir has said the in­quiry is a “des­per­ate ef­fort by Na­jib to si­lence his de­trac­tors.” He and other op­po­si­tion lead­ers have urged the gov­ern­ment to also set up a for­mal in­quiry into losses at 1MDB. Malaysia’s gov­ern­ment has said it found no crim­i­nal wrong­do­ing at 1MDB. But the fund has been at the cen­ter of in­ves­ti­ga­tions in the U.S. and sev­eral coun­tries amid al­le­ga­tions of a global em­bez­zle­ment and mon­ey­laun­der­ing scheme. Na­jib started the fund shortly af­ter tak­ing of­fice in 2009 to pro­mote eco­nomic de­vel­op­ment projects, but it ac­cu­mu­lated bil­lions of dol­lars in debts.

The US Jus­tice De­part­ment says at least $4.5 bil­lion has been stolen from 1MDB by peo­ple close to Na­jib and has ini­ti­ated ac­tion to seize $1.3 bil­lion it says was taken from the fund to buy as­sets in the US The gov­ern­ment com­plaints also say that more than $700 mil­lion has landed in the ac­counts of “Malaysian Of­fi­cial 1”. They did not name the of­fi­cial, but ap­pear to be re­fer­ring to Na­jib. Na­jib has re­sisted calls to re­sign, has clamped down on crit­ics and con­tin­ues to en­joy the un­wa­ver­ing sup­port of most rul­ing­party mem­bers, but his real test will come in next year’s elec­tions. Na­jib’s rul­ing coali­tion won the last elec­tions in 2013 de­spite los­ing the pop­u­lar vote to an op­po­si­tion coali­tion. —AP

Ma­hathir Mohamad

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