Forex scandal: Was Jaffar Hussein really kept in the dark?

 |Aug 21, 2017
Tun Dr Mahathir Mohamad. – MO file pic.

I first stumbled on former Prime Minister Tun Dr Mahathir Mohamad’s criminal activity in the late 80’s in New York when I went to the United Nations (UN) for consultations in my capacity as a senior official at the Commonwealth Secretariat in London.

A colleague who worked at Bank Negara Malaysia (BNM) with me when I was Advisor (now designated Assistant Governor), was then on the staff of the newly opened BNM branch office in New York.

This information intrigued me because I could not imagine why a central bank such as BNM would establish a branch outside of its national jurisdiction.

Upon further questioning, I was informed that the New York office was in the “money market.” It was active in the foreign exchange market. I asked whether it functioned as a money broker or did it take a position. When told that it did indeed take positions, I commented that it was engaged in speculative activities.

Such activities were strictly prohibited under the Central Bank Act as far as I could remember. When I asked where else had BNM opened a branch, I was told that there was one in London, managed by Tan Sri Dr Zeti Akhtar Aziz, later Governor of BNM.

Raja Petra Kamarudin’s (RPK) comment that the then Governor Tan Sri Jaffar Hussein was kept in the dark is difficult to reconcile with the fact. We are not talking about an overnight illegal operation involving a packet of peanuts, but one of the order of magnitude that alarmed the Bank of England, the Bank of Japan and other major monetary authorities around the world.

The operation was mounted over an extended period. It was an open secret and it is most improbable that there would have been no communication from Jaffar’s overseas colleagues expressing both concern and caution about this unprecedented activity which had placed BNM in the category of a rogue central bank. You could not have done anything of this nature involving the illegal use of our nation’s reserves without Jaffar’s knowledge and agreement, willingly or unwillingly given.

Tan Sri Nor Mohamed Yakcop, the ambitious Major-Domo who served his master, Mahathir, so faithfully and who will have much to tell the Royal Commission of Inquiry (RCI) has lived a charmed life.

In spite of his sleazy role in this disgraceful national scandal, now the subject of the RCI, he was made a Tan Sri and appointed to some of the nation’s trusted positions, giving credence to the public cynicism about the government’s transformation exercise.

The government has its work cut out by keeping corrupt party members a million miles away from such jars of honey as Felda, Tabung Haji and other government-linked companies (GLC).

Tunku Abdul Aziz is the former Special Adviser to former UN Secretary-General Kofi Annan on the Establishment of the UN Ethics Office and former Adviser to Bank Negara Malaysia.