No to closed-door RCI

> Nobody’s on trial, says commission chairman

PETALING JAYA: The Royal Commission of Inquiry (RCI) has dismissed a request for a closed-door inquiry into the foreign exchange losses Bank Negara Malaysia (BNM) incurred 20 years ago.

RCI chairman Tan Sri Mohd Sidek Hassan (pix) disagreed with the request by BNM’s lawyer Tan Hock Chuan on grounds that the proceedings were an inquiry and not a trial.

Tan made the request to have a closeddoor inquiry as several reports in the investigations had been classified under the Official Secrets Act (OSA) and may implicate witnesses called to take the stand.

“Nobody is on trial. We’ve been commissioned by the Yang di-Pertuan Agong to do this,” Mohd Sidek said in the Court of Appeal.

Two former Bank Negara employees, Abdul Aziz Abdul Manap and Datuk Ahmad Hizzad Baharuddin, were called to testify on the first day of the inquiry yesterday.

Abdul Aziz revealed that BNM had sustained losses of at least RM31 billion from 1988 to 1994, but there were no details on how the losses were incurred.

The media’s requests for Abdul Aziz’s statement, which took nearly 30 minutes to be read, were declined by Suhaimi Ibrahim, the conducting officer for the RCI.

When questioned by the RCI panel, the former accounts manager at BNM said he had merely provided an “accounting treatment” and was unable to provide further details on how the losses occurred.

“But surely the net (amount) itself has to be reflected in the balance sheet. I cannot see it, if you examine the balance sheet it does not appear,” Mohd Sidek said.

RCI panel member Tajuddin Attan had also asked why the BNM’s reserves appeared unaffected by the losses in later years.

BNM’s losses in 1992, 1993 and 1994 were recorded as RM8.496 billion, RM17.522 billion and RM2.686 billion, respectively.

“Given the fact that there were losses (along) the way and all of a sudden there is an increase in reserves, is there a possibility of any explanation?” Tajuddin asked.

Ahmad Hizzad testified that BNM had “no system of checks and balances” and “supervision over the Foreign Exchange Department was found to be lax.”

Asked by RCI panel member Saw Choo Boon on how it came to be that there was a “total lack of rules” and “disregard for authority”, and why trade volume ran into the hundreds of billions, Ahmad Hizzad said BNM did not have a “robust computer system” to capture all the transactions then as transactions were manually entered.

The forex losses were previously estimated to have amounted to US$10 billion (estimated then to be RM25 billion) by former BNM assistant governor Datuk Abdul Murad Khalid, in an interview with the New Straits Times in June.

Former prime minister Tun Dr Mahathir Mohamad had said he was told the losses were RM10 billion.

The scandal occurred under his administration but he has denied knowledge of BNM’s dealings and said he only knew what was reported to Parliament.