Open Letter to Dr. Mahathir Bin Mohamad–Bank Negara Forex Losses

December 26, 2017

Open Letter to Dr. Mahathir Bin Mohamad–Bank Negara Forex Losses

by Second Finance Minister Johari Abdul Ghani

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COMMENT | Dear Tun Dr Mahathir Mohamad,

Many of my friends who are readers of Tun’s blog, have contacted me for clarification regarding Tun’s latest writing entitled “Dear Mr Johari” on the issue of the speculative foreign exchange transaction.

At first, I told them that I have already said enough about the subject matter and I do not want to prolong the discussion on this issue especially since there is already an independent team at the Royal Malaysian Police (PDRM) investigating this matter.

The subject of foreign exchange activities can sometimes be too technical a subject for the ordinary man on the street to understand, particularly in relation to the role of Bank Negara Malaysia (BNM) in the management of the country’s international reserves. However, I felt it best that I try to hopefully close the discussion by putting the matter in simple perspective for ease of understanding.

It is very important for the public at large to understand the difference between speculative foreign exchange activities and orderly management of the foreign exchange market. The speculative foreign exchange activity, to put it in simpler words, is a kind of “gambling” activity with the hope of quick returns.

The orderly management of the foreign exchange market, however, is very much different in that it is a facilitation of liquidity by BNM to market participants in the country for the purpose of mitigating imbalances with respect to the ringgit’s supply and demand in the market.

To put the matter in perspective, it was highlighted in an internal audit report prepared by BNM’s internal auditors dated January 21, 1994 that the Foreign Exchange Operation Division of the Banking Department in BNM was involved in voluminous foreign exchange trading activities, so much so that the monthly maturing buying and selling of foreign exchange transactions which amounted to an average of RM140 billion in 1992 had increased to a staggering RM750 billion in 1993!

The substantial portion of such transactions was very speculative in nature and did not reflect BNM’s mandate to maintain the orderly condition of the foreign exchange market as per Section 4 of the Central Bank of Malaysia Ordinance 1958.

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Malaysia’s Notorious Currency Trader who broke Bank Negara Malaysia, Nor Mohamed Yakcop

The said internal audit report also highlighted that the magnitude of such foreign exchange speculative transactions was considered very excessive given that the shareholders’ fund of BNM was only RM4.4 billion and the country’s international reserves were merely RM43.98 billion at that material time. These speculative activities had caused BNM to suffer foreign exchange transaction losses amounting to RM31.5 billion during the period under review.

The Audit Report also stated that the voluminous speculative foreign exchange trading activities that the central bank had undertaken during that time were carried out by the Foreign Exchange Division of the Banking Department of BNM, headed by its advisor/manager then, Nor Mohamed Yakcop, whom later became the Minister of Finance II of the country.

Transfer of shares

Because of the scale of these foreign exchange speculative activities losses, the government was forced to transfer its shares in Telekom and Tenaga Nasional Berhad (TNB) to BNM at the nominal value of RM1 per share and these shares were immediately revalued by BNM at RM22.10 per share and RM19.30 per share for Telekom and TNB respectively.

In addition, BNM had to dispose off its Malaysia Airlines (MAS) shares to a third party at the price of RM8 per share and MISC shares at RM10 per share to Kumpulan Wang Pencen in order to realise the gain. If these speculative foreign exchange losses were not real, the government would not have taken these drastic actions in order to cover the BNM losses at that material time.

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Members of Royal Commission on Bank Negara Forex Losses

BNM and the country have since come a long way, particularly in instituting the necessary reforms and checks and balances with regard to its foreign exchange forward transaction activities. As a result of these reforms, despite the volatility of capital flows and the ringgit in the recent period, our economy continues to remain resilient and BNM’s ability to safeguard the financial and economic stability remains uncompromised.

In fact, our international reserves have continued to strengthen ever since and as at the end of November 2017, the reserves amounted to US$101.9 billion and were able to support 7.5 months of retained imports. I have said enough on this subject and if the understanding of the truth is not the objective of the discussion, then there is nothing much I can say on this.

I wish Tun and family the very best of health and a very Happy New Year; may the New Year be peaceful and prosperous for all of us Malaysians.

JOHARI ABDUL GHANI is Finance Minister II.

Bank Negara Malaysia: Why Dr. Sukhave Singh Resigned

December 10, 2017

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Thank you, Dr. Sukhave for your service to Bank Negara Malaysia. What you have done by resigning is just examplary. It took courage and firm moral conviction to do it. As a Bank Negara alumnus who was with the Bank in 1960s, I am proud of you and wish you all the best. –Din Merican

Letter from outgoing Deputy Governor BNM–Why Dr. Sukhave Singh Resigned

If you are in a position of leadership, remind yourself, and remind yourself often, that leadership is a responsibility and not a privilege. Remember that nothing shines a brighter light into the depths of your character than your behaviour when you believe that you have power over others. It is never leadership to try to make yourself look good by depriving your subordinates of opportunities to be their best. It is also never acceptable to use bullying as a means to exert your leadership. Respect yourself; respect those who work for you.– Dr. Sukhave Singh

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Last week a long-standing and respected official, the Deputy Governor, Bank Negara Malaysia Dr Sukhdave Singh, resigned and people ought to take that move as a heavy hint as to what is going on behind the scenes.

Dear Friends and Colleagues,

As you all know by now, I am leaving the Bank soon. Some of you have asked me why I am leaving and I must confess that I have evaded the question.

All I can say is that my life in the Bank has been based on certain professional expectations, and when I find myself put in circumstances where those expectations can no longer be met, there could have been no other decision for me.

This past week has been an emotional roller-coaster. The days have flown by so fast and saying goodbye has been harder than I had anticipated. Meeting many of you has brought back a flood of memories and emotions. But I am grateful for the opportunity to personally wish you goodbye, and I thank you for the kind wishes you have expressed to me.

In parting, I want to express my gratitude to those of you who have worked with me and helped me succeed in my job. No one gets to my position without the help of others. I am unable to thank each of you individually but I hope you know that I am referring to you and please accept my heartfelt thanks.

If I have contributed to your own professional success, I am glad; but you do not need to thank me. Pay it forward – be a part of someone else’s success.

If you are in a position of leadership, remind yourself, and remind yourself often, that leadership is a responsibility and not a privilege. Remember that nothing shines a brighter light into the depths of your character than your behaviour when you believe that you have power over others. It is never leadership to try to make yourself look good by depriving your subordinates of opportunities to be their best. It is also never acceptable to use bullying as a means to exert your leadership. Respect yourself; respect those who work for you.

Well, my journey with BNM has come to an end, but yours will continue. I wish you fair weather and good sailing.

Goodbye and God bless.

Sukhdave Singh



Forex RCI blames Ex-Khazanah Nasional Vice Chairman Nor Yakcop

December 1, 2017

Forex RCI blames  Ex-Khazanah Nasional Vice Chairman Nor Yakcop


Bank Negara suffered losses amounting to RM31.5 billion in foreign exchange (forex) trading between 1992 and 1994, the Royal Commission of Inquiry (RCI) into the matter said.

The RCI also established that Nor Mohamed Yakcop, who was part of Bank Negara’s management at the time, was the person in charge of the forex dealing operations. The commission is also of the opinion that this incident involved a criminal breach of trust under Sections 406 and 409 of the Penal Code.

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Nor Mohamed (pic above) was in charge of portfolios at Bank Negara between 1986 and 1993, including managing external reserves and regulation of domestic financial markets.

However, the RCI said, other parties had to share the blame as well.“Although he had dominion over BNM’s funds and seemed to have had a free hand in forex dealings, he could not have carried on for such a long time without the direct or tacit approval of his superiors and/or other persons in authority.

“Therefore, the commission assessed the joint liability of these persons, which could fall either under Section 34 or Section 107 of the Penal Code and explained as having the common intention or abetting,” the commission adds in its report, which was released today.

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A former deputy governor of Bank Negara Malaysia (BNM), Dr. Lin See Yan told the Royal Commission of Inquiry (RCI) that he was shocked at the scale of the foreign exchange (forex) losses suffered by the central bank 25 years ago.

These individuals, according to the RCI, are then Bank Negara governor Jaafar Hussein, his deputy Lin See Yan, Bank Negara’s board of directors, then Finance Minister Anwar Ibrahim and then Prime Minister Dr Mahathir Mohamad.

Dr M and Anwar’s role

Furthermore, the RCI said, the incident involved an element of cheating in violation of Sections 417 and/or 418 of the Penal Code.

“The possibility of joint liability was also examined. It could be proven that several persons from Bank Negara, the Finance Ministry, Auditor-General’s Department, including Bank Negara’s board of directors and the Finance Minister, had all the information on the forex losses and were involved in the concealment of actual losses in Bank Negara’s forex dealings.

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“Therefore, they should be jointly liable for the offence,” the report states. The RCI also accused Mahathir and Anwar of withholding information on the forex losses from the cabinet.

“The Finance Minister was also the main person responsible for withholding the facts and information of the forex losses to the cabinet.

“The Prime Minister, who also had knowledge of the forex losses, did not correct or offer more information when the losses informed to the cabinet were not the actual losses,” reads the report.

No further recommendations

The RCI also concluded that Bank Negara’s forex trading activities at the material time contravened Section 31(a) of the Central Bank Ordinance 1958 as the volume of transactions exceeded the reserves.

The RCI also opined that there was a deliberate concealment of the forex losses as it was not accurately reflected in the Bank Negara annual reports.

“The commission is of the opinion that the then Finance Minister had deliberately concealed facts and information and made misleading statements to the cabinet.

“The commission is also of the opinion that the then prime minister had condoned the actions of the Finance Minister,” the report states.

Apart from criminal investigations, the RCI said, no further enhancements to Bank Negara were necessary as substantial measures had been implemented to improve governance of reserves.

“No further enhancements are being recommended, as the various measures for improvement in the overall governance and internal controls of the bank have been adequately addressed in the Central Bank of Malaysia Act 2009,” the report says.

The RCI began its investigations on July 15 and was tasked with establishing whether Bank Negara made losses in the 1990s through forex speculation, whether laws governing Bank Negara were violated, whether there was concealment of facts, recommending action against those responsible and recommending action to prevent the incident from recurring.

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The five-member panel (pic above) comprised Mohd Sidek Hassan (chairperson), Justice Kamaludin Md Said, Tajuddin Atan, Saw Choo Boon and SAK Pushpanathan.



RCI brands Bank Negara’s forex activities ‘excessive’

RCI recommends Dr M and Anwar be probed, claims Daim abetted CBT

Bank Negara RCI –A Political Witch hunt?

September 26, 2017

Bank Negara RCI –A Political Witch hunt

by Wan Saiful Wan

The hearings of the Royal Commission of Inquiry (RCI) on Bank Negara Malaysia’s foreign exchange trading losses has ended. They called in 25 witnesses, and apparently more than 40 relevant documents have been scrutinised.

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The RCI was to investigate the losses incurred by Bank Negara in the early 1990s. The RCI was led by its chairman Sidek Hassan, who is former Chief Secretary to the government and current chairman of PETRONAS.

At the beginning of the RCI, Sidek told the public that they had been given five key tasks.

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Zeroing the Blame on Dr. Mahathir for Bank Negara Forex Losses.But what about 1MBD Scandal?

First, to determine the authenticity of the allegation on the foreign exchange trading losses suffered by Bank Negara Malaysia in the 1990s and its implications on the national economy.

Second, to determine whether BNM’s involvement in the foreign exchange trading activities which caused the losses had contravened the Central Bank Ordinance 1958 or any relevant laws.

Third, to determine whether there were hidden facts or information relating to foreign exchange losses suffered by BNM and misleading statements given to the Cabinet, Parliament and the Public.

Fourth, to recommend suitable actions to be taken against those found to be directly or indirectly involved in causing the losses and hiding the facts and information on the losses.

Fifth, to recommend appropriate measures to ensure the incident will not recur.

I find the increasing demands for RCIs rather worrying. Yes, indeed it is a legitimate tool that we can use to investigate any pertinent matter. But the fact that we see more and more people calling for RCIs on various issues show that there is a lack of trust in the regular mechanisms or institutions that exist to investigate matters.

We already have bodies like the police and the Malaysian Anti-Corruption Commission (MACC), plus various other law enforcement agencies, whose jobs are to conduct investigations on matters under their purview.

Public demand for RCIs to be formed imply that they do not fully trust the existing institutions, and that is why another body needs to be formed. This declining trust in our public institutions worries me.

In any case, the formation of this latest RCI is another low in itself. It was formed to investigate a matter that took place 30 years ago, when there are more than enough things that remain unresolved today.

The Malays have a saying about this: “Gajah depan mata tak nampak, tapi kuman di seberang laut nampak jelas.”

Supporters of former Prime Minister Dr Mahathir Mohamed have claimed that the RCI is an attempt by the government to tarnish his legacy. They have a point.

The focus of this investigation seems to be on Mahathir alone. With a stretch, perhaps it will implicate Anwar Ibrahim too. But the focus seems to be Mahathir.

I find this truly amazing because the RCI was formed only when Mahathir formed a new political party that is currently challenging UMNO.

When he was still in UMNO, nobody was interested in investigating him. And when he was Prime Minister, many of these people, from all races and religions, were kissing his hands.

Some of the current members of the Cabinet were Mahathir’s ardent defenders soon after the losses were incurred by Bank Negara. They stayed sheepishly silent while Mahathir was their leader. And they continued to be silent even after Mahathir’s retirement as Prime Minister in 2003.

Is it a coincidence that these politicians suddenly found their conscience a few months after Mahathir founded a new opposition party?

Where did they hide that conscience during the years when they were worshipping Mahathir?

Malaysia follows a Westminster-style democracy where the cabinet as a whole acts collectively. There is no one-man-show. All members of the cabinet are collectively and equally responsible for all the decisions.

Now with the new-found conscience, can we reasonably expect that everyone who has ever served under Mahathir’s Cabinet will take collective responsibility for any recommendations made by the RCI?

Or are they going to blame Mahathir alone since he is now an opposition leader, while claiming infallibility for those who are still in government?

An RCI is an institution that we usually appeal to in order to boost confidence in our system of government. When other bodies cannot fully fulfil the trust burden, we often appeal to entities like the RCI to step in and play their roles.

The high regards commanded by an entity like the RCI is the reason why it usually works. That is also why such a body deserves the word “Royal” in its name. But abusing an RCI like this is completely unacceptable. It erodes trust in yet another institution in the country.

If Mahathir has done any wrong in the Bank Negara forex dealings, then those people who were in his Cabinet at that time should have resigned in protest, or they should at least have spoken, then. Not just now. But they had 30 years to do it.

Failing to resign at that time shows that they have no real principles. And what a shame that they damage public trust in the noble institution of the RCI too in this blatant exhibition of their hypocrisy.

Wan Saiful Wan Jan is chief executive of Institute for Democracy and Economic Affairs (IDEAS).


Bank Negara Malaysia Forex RCI – what it has, and has not, established

September 23, 2017

Bank Negara Malaysia Forex RCI – what it has, and has not, established

by P.

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No Longer Deputy Chairman, Khazanah Nasional Berhad. Finally. He may end up carrying the can. But that is purely academic; the foreign exchange loss incurred by Bank Negara Malaysia is real–some RM30 billion

QUESTION TIME | Three people collectively knew of what exactly transpired in Malaysia’s RM31.5 billion foreign exchange losses, but the demise of one of them results in a missing piece of evidence which would have provided the link in the chain of accountability as to who was ultimately responsible.

Even as the first casualty of the Royal Commission of Inquiry (RCI) into Bank Negara Malaysia’s (BNM) foreign exchange losses occurs, it is clear that the commission has not established much going by the proceedings which ended two days ago.

If the political intention in the setting up of this inquiry, or inquisition as some have called it, is to ascribe blame to and imply benefit to some – especially the Prime Minister at the time, Dr Mahathir Mohamad – it has not been conclusive.

But the extent of the losses to the country is clear – RM31.5 billion between 1991 and 1994, given to the RCI by a BNM staff member. Even this piece of vital information was in the public realm for some time, although it is good to have clear confirmation now.

The difference between the situation at BNM (highly irregular and speculative trading by the central bank) and 1MDB (alleged theft) are quite different even if the amounts involved are of the same order of RM30 billion. No one except the counterparties to BNM’s trade, including currency trader George Soros, benefited from the massive positions taken by BNM.

It was also established that there were attempts to hide the extent of losses, widely reported at the time to be just RM5.7 billion, going by the deficiency in shareholders’ funds of BNM for 1993. In fact, the RCI was told by a BNM official that several papers involving the losses were classified under the Official Secrets Act. But it was not established who decided to classify the documents.

There were gaps in terms of the chain of command that led to the losses which the RCI was not able to fill. Former Bank Negara advisor Nor Mohamed Yakcop said he accepted his fair share of accountability over the foreign exchange (forex) losses incurred in the late 1980s and early 1990s.

But he said he never discussed the forex transactions in the years between 1986 and 1993 with both the then Finance Minister Anwar Ibrahim and Prime Minister Mahathir, which if true, absolves them of blame for the losses.

“The forex losses occurred, there is no denying it. There is also no denying my accountability for the forex losses. I accepted my fair share of the accountability and resigned from Bank Negara.”

Nor Mohamed became the first casualty of the RCI as he resigned his Deputy Chairman’s position at Khazanah Nasional Bhd, the government sovereign fund which he had helped nurture back into capability and trust starting in 2004 under previous Prime Minister Abdullah Ahmad Badawi.

He had been under political pressure to finger Mahathir over the forex scandal but he steadfastly refused to do so.

Lengthy document

He issued a document of nearly 4,000 words to the RCI, which makes compelling reading, outlining the events leading to BNM’s forex trading activities.

“Prior to 1985, BNM was not active in external reserves management, including forex trading, given the relative stability in the international foreign exchange market.

“The situation changed in 1985. On 22 September 1985, five OECD countries met in private at the Plaza Hotel in New York and decided among themselves, without consulting other countries, that the yen and the German Deutsche mark should be strengthened significantly against the US dollar by way of market intervention,” he said.

This was the exact same argument given by Mahathir as I explained in this article when he justified BNM’s interventions in the currency market.

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“If the political intention in the setting up of this inquiry, or inquisition as some have called it, is to ascribe blame to and imply benefit to some – especially the Prime Minister at the time, Dr Mahathir Mohamad – it has not been conclusive.”–P. Gunasegaram

Bernama reported on November 5, 1990: “Speaking to reporters after delivering a keynote address at the 17th Asian Advertising Congress here, Datuk Seri Dr Mahathir said, ‘We are stabilising our own currency.

“‘When they do something it is always alright. We are trying to protect our currency. We have lost a lot of money before when they revalued their currency like the yen. We lost a lot of money because we borrowed yen, when they devalued their currency we also lost money.

“‘So what is wrong with our protecting our own interest, why is it when they can protect their interest and we cannot. I cannot understand this.’”

That’s clear indication he condoned currency trading by BNM. Of course, that does not necessarily mean Nor Mohamed would have taken instructions from Mahathir, although they were on the same page in their views.

The person who Nor Mohamed reported to was Jaffar Hussein, then BNM Governor. He quoted Jaffar’s speech which advocated active intervention in the forex markets to manage reserves, to indicate that Jaffar was the main architect of the policy. Mahathir too put the responsibility of the forex trades on Jaffar.

Said Nor Mohamed in his statement: “I need to elaborate on this point because Allahyarham Tan Sri Jaffar Hussein is no more with us, and it is important that we recognise the wisdom of this great man. The Governor believed that by active management of the external reserves, we will be able to acquire the skills, knowledge and experience required to serve the nation, when required, both in developmental activities as well as to overcome any financial crisis that the nation may face in the future. He termed this as ‘market expertise’.

“Indeed, Allahyarham Tan Sri Jaffar Hussein’s foresight regarding market expertise saved the nation during the 1997/1998 financial crisis. In a strange twist of history, the skills, knowledge and experience acquired in BNM enabled the nation to implement the Unorthodox Measures of September 1998.”

And Nor Mohamed went on to enumerate how he used this “expertise” to help rescue the country from the ravages of 1997-98 Asian financial crisis and saving the country hundreds of billions of ringgit.

Missing link

However, former Finance Minister Anwar Ibrahim, now an ally of Mahathir under Pakatan Harapan, fingered Nor Mohamed as the person most responsible and had wanted him sacked.

Anwar said Nor Mohamed was found to have overstepped his boundaries following the forex losses.

“He did not report the true picture to him (Jaffar). I instructed that Nor Mohamed be sacked, if possible, by 4pm (on the day of the meeting). If he didn’t resign, I would have sacked him.”

Asked about Nor Mohamed’s comments about learning a lesson, he was scathing: “His assertions are absurd. You must be accountable. It doesn’t have to cost the country billions to learn a lesson. He should go back to business school (to learn a lesson),” said Anwar.

Mahathir similarly laid the blame on Jaffar. Citing a meeting with Jaffar, he said he was informed verbally by the then governor that BNM could strengthen the country’s reserves and currency through forex trading. Jaffar’s decision to go actively into forex trading, said Mahathir, was not made with his knowledge.

“As Prime Minister, I was never involved in Bank Negara’s administration and I believe that I was not permitted under the law to get involved in its policies and affairs.”

Mahathir, however, says this does not mean that the Governor, then, never talked about the central bank in general terms.

According to Nor Mohamed, in his written communication to the RCI, he was tasked with implementing the external reserves management policy as determined by the BNM’s board.

“…I reported both to the Governor and the External Reserves Committee (ERC). I spoke to the Governor on external reserves management regularly, and certainly whenever there was a large movement in the exchange rates. I also reported to the ERC whenever it met. The membership of the ERC comprised, amongst others, the Governor, Deputy Governor, and the Advisors. Further, there were weekly Senior Officers Meeting, where the external reserves matters were sometimes discussed.”

However, then deputy governor of BNM Lin See Yan has a different story to tell. Lin told the RCI he was first informed about the losses by the former bank Special assistant to the Governor, Lee Siew Kuan.

He also said he was then informed about the losses by “friends from the International Monetary Fund (IMF)”. “They told me ‘we know you have made open positions and you have made big losses, please stop it’.” Both Lin and Lee then went to see Jaffar whom Lin said had confirmed the losses.

“We asked how big the losses were, he said he was not sure.”

Jaffar, said Lin, had then agreed that Lee, with the help of former Bank Negara Assistant Governor Abdul Murad Khalid, were to then carry out preliminary investigations immediately. The investigations then had found that Bank Negara had large open forward positions in multiple currencies which meant that the bank would suffer more losses.

“As a central banker, (for me) the risk was not acceptable,” said Lin.

Circumstantial evidence

Meantime former Finance Minister Daim Zainuddin, during whose tenure from 1985 to 1991 BNM started engaging in active forex trading, denied any knowledge of forex dealings, raising the question as to who the instructions came from. Daim also said if he knew about the forex trading, he would have stopped it.

Mahathir, as explained, is likely to have known and sanctioned BNM’s orthodox foreign exchange activity. The three people who would have known for sure the chain of authority are Mahathir, Nor Mohamed and Jaffar. Mahathir and Nor Mohamed’s accounts to the RCI implicate Jaffar, who is not here to defend himself.

The RCI is expected to complete its probe within three months from the date of its setting up on July 15 and thereafter submit its report to the Agong.

But unfortunately, there are not many conclusions that it can make considering that the RCI comes 25 years too late. What is clear is RM31.5 billion in losses were made.

What is not clear is how they were made and why certain people were given so much authority to trade way beyond the normal acceptable limits for a central bank. No central bank has before or since lost more money on trading than BNM.

The answers will continue to be in the realm of conjecture and circumstantial evidence. There can be little doubt that Nor Mohamed was doing what he thought was best for the country. But it should have been very clear to him that he was taking a large risk because the losses would have been massive – and turned out to be so – if his bet was wrong.

Was he acting entirely on his own when he took that bet? Is it likely he consulted no one before he made his bets? Who gave him the go-ahead to make such unprecedentedly large bets? Did he exceed the limits set by BNM? Were there any limits?

Was Jaffar indeed the architect of BNM’s forex policy? Remember, his background was accountancy  – he was a partner at PwC. He was known to be conservative when he was CEO of Malayan Banking. Was he protecting someone when he took the rap?

This hastily convened RCI, which has a couple of months to complete its report and recommendations, is not going to answer all these questions satisfactorily.


Nor Mohamed Yackop– Not Sacked but elevated under Mahathir, Badawi and Najib Razak

September 9, 2017

Nor Mohamed Yackop– Not Sacked but elevated under Mahathir, Badawi and Najib Razak

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Khazanah Nasional Berhad’s Deputy Chairman–The Currency Trader  Rogue who broke Bank Negara Malaysia–Nor Mohamed Yakcop. He was never made to account for his excesses. Instead, under Mahathir, Badawi and Najib Razak was elevated. That is the genius of Malaysia

ANWAR Ibrahim wanted to sack Bank Negara Malaysia’s (BNM) Assistant Governor Nor Mohamed Yakcop for exceeding his boundaries in forex trading, the Royal Commission of Inquiry (RCI) into the forex losses, heard today.

Anwar, who was then Finance Minister, told the RCI that Nor Mohamed had not only exceeded his boundaries, he had also failed to provide an accurate report on the losses suffered by BNM through forex trading.

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“The final explanation (by Jaffar) was accurate because (it) verified that Nor Mohamed exceeded the mandate given to him. “(Nor Mohamed) did not give an accurate report to him (Jaffar).

“I instructed that Nor Mohamed be sacked, if possible at 4.00pm (during their meeting),” said Anwar in reference to a conversation he had with the then Bank Negara Governor Jaffar Hussein in 1994.

Anwar added he would have initiated the sacking if Nor Mohamed refused to resign. Nor Mohamed resigned from his position in April 1994.

Anwar, the de facto leader of PKR and Pakatan Harapan, also criticised Nor Mohamed for the latter’s testimony at the RCI yesterday where he had said he deemed the forex losses as a lesson that helped the country in facing the Asian financial crisis.

“His assertions are absurd. You must be accountable (for what has happened),” said Anwar when the matter was prompted by RCI panel member Saw Choo Boon today.


In his testimony yesterday, Nor Mohamed took accountability over the forex losses and admitted he was responsible for BNM’s forex trading from 1986 until 1993, before his resignation. He said that he accepted his fair share of accountability over the forex losses incurred in the late 1980s and early 1990s.

Nor Mohamed also told the RCI panel that he never discussed the forex transactions in the years between 1986 and 1993 with both Anwar and then prime minister Dr Mahathir Mohamad.