Dr M’s reaction was normal when informed about RM30 billion losses by BNM — Witness

PUTRAJAYA: Former deputy secretary general (II) , Ministry of Finance Tan Sri Clifford Francis Herbert, told the Royal Commission of Inquiry ( RCI) to investigate Bank Negara Malaysia’s ( BNM) foreign exchange losses in the 1990s that former premier Tun Dr Mahathir Mohamad reacted normal when informed about the RM30 billion losses suffered by the central bank in 1993.

He was questioned by conducting officer for RCI, Julia Ibrahim, on what was Dr Mahathir’s expression and whether he was shocked, when informed the matter.

In his witness statement , Herbert, 76, said he and former finance minister Datuk Seri Anwar Ibrahim briefed Dr Mahathir on the losses suffered by BNM which amounted to about RM30 billion.

He said they met Dr Mahathir at the Prime Minister’s office in late 1993.

After being briefed on the matter, he said, Dr Mahathir responded by saying “sometimes we make profits and sometimes we make losses”.

Herbert, who is also former secretary general to the Treasury, Ministry of Finance, said Anwar was then a lso responsible for defending BNM in Parliament. Herbert was testifying in RCI’s proceeding to investigate foreign currency losses (forex) experienced by BNM in the 1990s.

He said he was not aware of the losses incurred by BNM in forex transactions when he was the deputy secretary- general of the Finance Ministry.

“I only came to know about this losses in late 1993 when I was instructed by Anwar, who was then Minister of Finance, to check on the losses suffered by Bank Negara.

“I asked the secretary to the Board of Directors to provide me with the relevant information on the forex losses suffered by Bank Negara, but I can’t remember the name of the secretary I communicated with. I was provided certain documents by Bank Negara and I did my own calculations and reported to Anwar by way of a note saying that the bank suffered losses in forex transactions amounting to about RM30 billion,” he said when testifying in the RCI’s proceeding to investigate foreign currency losses by BNM in the 1990s.

However, Herbert said he could not remember the losses were for which year. Herbert, who is the 14th witness, said he and one individual, but could not remember who the person was, had advised Anwar to ask Tan Sri Nor Mohamed Yakcop, who was then BNM’s advisor to resign because he was the person responsible for the losses.

“Anwar agreed with us. I called up the secretary to the Board of Bank Negara and informed that Anwar had agreed that Nor Mohamed Yakcop should resign from Bank Negara,” he said.

Herbert also told the RCI proceeding that in late 1993 or early 1994, Tan Sri Lin See Yan who was then deputy governor of Bank Negara met him at his of f ice and told him that Bank Negara was basically insolvent, largely due to the forex losses.

The public proceeding chaired by Tan Sri Mohd Sidek Hassan will resume on Sept 6.

Mohd Sidek, who is also Petronas chairman, is assisted by High Court judge Datuk Kamaludin Md Said and Bursa Malaysia Berhad CEO Datuk Seri Tajuddin Atan, Special Task Force to Facilitate Business ( Pemudah) co- chairman Tan Sri Saw Choo Boon and Malaysian Institute of Accountants member, K. Puspanathan.