Ghafar Baba could have been the premier if Mahathir had resigned over forex scandal

 |Feb 9, 2017
Mahathir should be blamed for Bank Negara's losses in forex.
Mahathir should be blamed for Bank Negara’s losses in forex.

Most political analysts talk about how Tengku Razaleigh Hamzah almost became the fifth prime minister (PM) of Malaysia in 1987 had Mahathir Mohamad not cheated in the party elections.

What no one talks about, and let Malaysia Today be the first to talk about it, is how Abdul Ghafar Baba almost became the fifth PM five years after that in 1992.

Since 1989, the foreign media had been talking about how Bank Negara was the biggest forex gambler in the world and how the amount they traded ran into billions and how Malaysia was being exposed to more than RM270 billion at any one time and how the US had warned Malaysia to ‘cool it’ and so on.

On September 16, 1992, Bank Negara’s folly was proven when George Soros attacked the market with US$8 billion of borrowed funds and in just a few days walked away with a profit of US$1.2 billion while Malaysia lost its pants.

Of course, Mahathir blames Soros for Malaysia’s loss (he refuses to acknowledge that it was his fault because everything was not his fault).

Mahathir’s forex gamble

What Mahathir did not explain is how could Malaysia have lost so much money playing the forex market if Bank Negara was not gambling on the market in the first place?

I mean you cannot lose money gambling if you were not gambling but was sitting at home watching TV.

So why blame Genting for your losses when the job of Genting is to make money from gamblers and if you were not gambling in Genting it was impossible to lose money?

Anyway the question is, how much did Malaysia really lose?

Was it RM30 billion, US$10 billion or more than RM150 billion?

No one knows because when Lim Kit Siang raised this matter in Parliament in 1993 and 1994 Anwar Ibrahim lied.

Furthermore, the government did a lot of what accountants would call ‘creative accounting’ to cover up the real extent of the loss

In other words, you do not pick up those losses in that year but defer them to the next year and you revalue certain assets and investments and you do asset-stripping at hugely inflated values and treat certain losses as ‘something else’ and so on (which we are going to talk about in the next article).

There are many ways to do creative accounting to turn losses into profits or huge losses into small losses and this is what the government did to cover up and hide Bank Negara’s forex losses.

DAP veteran leader Lim Kit Siang now sings a different tune on Mahathir's forex scandal.
DAP veteran leader Lim Kit Siang now sings a different tune on Mahathir’s forex scandal.

People like Lim Kit Siang and Mahathir Mohamad argue that losing money is part of doing business and is not a crime.

That may be true, and which is the case with 1MDB.

But then denying those losses, hiding the losses, doing creating accounting to reduce those losses, not declaring those losses, lying to Parliament, and so on, are crimes.

We are not saying that losing money was a crime.

We are saying that lying about losing money is a crime, especially lying to Parliament, which can get you impeached.

The fact that Daim Zainuddin asked Mahathir to replace him with Anwar Ibrahim as finance minister as early as 1991 was already an indication that the crime involving covering up Bank Negara’s forex losses was premeditated.

It was not until two years later in 1993 that Kit Siang got wind of the crime and raised it in Parliament.

Of course, Parliament was not told the truth and the following year in 1994 Kit Siang again raised the matter in Parliament and accused Anwar of lying.

The cover-up on Bank Negara forex losses

Technically, Bank Negara had gone bankrupt and Mahathir and Daim did not want the world to know.

However, the world already knew, which was why Kit Siang also knew and raised it in Parliament.

This was the reason for the lies and the cover up.

You can read the 1994 Parliament Hansard, starting from page 70, here: Hansard 1994.

Kit Siang pointed out that Anwar lied to Parliament in 1993 by saying Bank Negara suffered a ‘small paper loss’ whereas the loss was actually RM30 billion.

Kit Siang also revealed that Bank Negara’s exposure was RM270 billion or five times Malaysia’s GDP.

You should read the Hansard, which is very detailed and reveals a lot.

We have to thank Kit Siang for this revelation or else none of us would have known about it.

In short, what Kit Siang said was they lied and covered up the truth.

The losses Bank Negara suffered, whether it was RM30 billion like Kit Siang said, or US$10 billion like Murad Ahmad revealed recently, or actually more than RM150 billion if you take everything into consideration, was not the issue and was not the crime we are talking about.

The crime is in the cover-up and the lying, especially lying to Parliament, and not revealing that Bank Negara was technically bankrupt.

Now, what would have happened had Daim not handed over the post of finance minister to Anwar in 1991, and had Anwar not lied to Parliament in 1993 and 1994 like instructed, and had Parliament been told the truth about what happened over 1989 to 1992, and had it been revealed that Bank Negara was technically bankrupt?

Well, simple, Mahathir would have had to resign as prime minister and Ghafar would have taken over as Malaysia’s fifth PM.

Mahathir wants to oust Najib as PM but until all his attempts have not successful.
Mahathir wants to oust Najib as PM but until all his attempts have not successful.

Kit Siang had already revealed the truth (even though he was wrong about it being RM30 billion when it was actually more).

If Anwar had not lied and had told the truth then Daim and Mahathir would have both been made to answer for this.

Daim had already resigned as finance minister so Mahathir would have had to join him and resign as PM.

Because of that Malaysia ended up with Mahathir as PM for another 11 years until 2003 instead of Ghafar as the fifth PM in 1992.

Real crime

So that is the crime we are talking about.

Bank Negara’s bankruptcy is not the issue.

Lying about it is.

Because of this lie Mahathir was not made to pay for what he did.

Because he stayed as Prime Minister 11 years longer than he should he caused more damage along the way.

Not only did Mahathir cause more damage from 1992 to 2003, he also created damage after he resigned in 2003 by ousting Abdullah Ahmad Badawi and is creating damage now by trying to oust PM Najib Razak so that his son, Mukhriz can take over.

So now the truth is known because recently Murad revealed the truth.

Kit Siang on silent mode

But then Kit Siang who had been barking and foaming at the mouth for more than 20 years since 1993 is saying nothing (when he talked so much in 1994, as the Parliament Hansard shows).

So why has Kit Siang suddenly gone quiet?

Why is Kit Siang now defending Mahathir and telling us that no crime has been committed even though Bank Negara lost so much money to the point of going bankrupt, which we still do not know how much, and that there was a cover-up and Parliament was lied to?

Simple, because if Mahathir can oust Najib and Mukhriz takes over as PM, then Kit Siang is going to become the deputy PM (DPM) and finance minister.

As the English would say, that is worth more than all the tea in China.

So what is RM100 billion or so of taxpayers’ money if Kit Siang can become the DPM and finance minister? – Malaysia Today

Raja Petra Kamarudin or RPK, cousin to the Selangor Sultan, is one of Malaysia's earliest online 'citizen journalists'. He started his website in 1995 before the internet 'explosion' triggered by the Reformasi movement in September 1998. Malaysia Today was launched as a blog in August 2004 and is one of the few pioneer blogs still active and posting articles on a daily basis 24-7. RPK, 66 years old, has been writing since 1990.