‘FOREX DESK COULD BE EXPLOITED’
People in BNM with know-how could make profit, says Forex Dept manager
THERE were numerous opportunities for people to exploit the foreign exchange (forex) trading desk of Bank Negara Malaysia (BNM) for their own gain back in the 1990s.
This was possible because there was no system of “checks and balances” from 1990 to 1994, according to BNM’s Forex Department manager Azman Mat Ali.
“I started working in BNM in 1988 as a dealer at the forex desk. I held this role for 10 years until 1998. I was then transferred to other roles in the bank, before returning to the Forex Department as a manager last year,” he told the Royal Commission of Inquiry (RCI) on BNM’s forex losses in the 1990s yesterday morning.
“I reported directly to three chief dealers in the Forex Department between 1988 and 1998, and also at times, directly to (then BNM adviser) Tan Sri Nor Mohamed Yakcop.”
Azman said all BNM’s forex transactions then were done manually, and thus, there was no system of “checks and balances”, at least in the years of 1990 to 1994.
“In my opinion, there were opportunities to exploit this (lack of “checks and balances”) by individuals within the bank who had the know-how,” said Azman, 54.
“It is also in my opinion, that there were opportunities for individuals in the bank to profit from insider information (of BNM) to trade with other parties.”
Azman also said there were no specific maximum limits for forex trading on any given day or month.
He recalled that the amount had reached billions of United States dollars at certain times.
This prompted a question from RCI panel member Datuk Wira Kamaludin Md Said: “You said that you deal up to billions in US dollars a day. Do you have an estimation of how much, exactly?”
“No, I do not remember the specific amount,” replied Azman.
Following that line of questioning, RCI chairman Tan Sri Mohd Sidek Hassan asked: “Would it be over (something like) US$1 billion?”
After a pause, Azman said: “Yes, most likely.”
Azman also had no comments on the statement by former assistant governor Datuk Murad Abdul Khalid about the forex trading losses amounting to some RM31 billion between 1990 and 1994.
“I might have roughly known that we were making losses, but I didn’t know the losses in totality as I was only a forex dealer following the directions of my superiors.”
The RCI has been tasked with identifying the cause of BNM’s forex losses, amounting to some RM31 billion.
Other RCI panel members are Bursa Malaysia Bhd chief executive officer Datuk Seri Tajuddin Atan, Special Task Force to Facilitate Business (Pemudah) cochairman Tan Sri Saw Choo Boon, Malaysian Institute of Accountants member K. Pushpanathan and the Finance Ministry’s Strategic Investment Division director Datuk Dr Yusof Ismail, who is also the commission’s secretary.
Yang di-Pertuan Agong Sultan Muhammad V gave the RCI until Oct 13 to complete its proceedings and submit a report. Additional reporting by Hana Naz Harun