Mahathir’s forex scandal – Lim Kit Siang in switch off mode

 |Feb 1, 2017
 As finance minister then, Anwar Ibrahim covered up the forex scandal for Mahathir Mohamad and Daim Zainuddin.
As finance minister then, Anwar Ibrahim covered up the forex scandal for Mahathir Mohamad and Daim Zainuddin.

The September 16, 2008 will go down in Malaysian history as the day of infamy.

That was the day when 30 Barisan Nasional MPs were supposed to have crossed over to Pakatan Rakyat and Anwar Ibrahim was supposed to have been sworn in as the new prime minister of Malaysia to replace Abdullah Ahmad Badawi.

That, however, did not quite happen and instead Najib Razak took over six-and-a-half months later on April 3, 2009.

Mahathir Mohamad has his own September 16, day of infamy.

That was September 16, 1992, which is known as ‘Black Wednesday’.

That was the day George Soros attacked the forex market with US$8 billion borrowed money and walked away with a profit of US$1.2 billion in just a few days.

Unfortunately, Bank Negara Malaysia had to suffer a loss of US$10 billion, or RM98 billion at today’s value.

A number of people are angry with me for talking about Bank Negara’s forex losses, which they say happened 25 years ago and therefore was no longer relevant.

We must talk about events of today, they argue, such as the 1MDB issue.

Stop talking about the Bank Negara forex issue, which is an old story.

Write about 1MDB!

If they want to talk about 1MDB then let us talk about 1MDB.

1MDB involves RM42 billion while the actual amount involving Bank Negara’s forex scandal is not confirmed yet and different people are confirming different amounts.

1MDB is about a cash-flow problem while Bank Negara’s forex scandal involves money disappearing into thin air.

1MDB is a victim of sabotage while the Bank Negara forex scandal involves hiding the truth and lying to Parliament.

1MDB is being restructured and is being turned around while the Bank Negara forex losses is money down the drain and gone forever.

So far RM30 billion has been recovered from 1MDB and more is coming in while nothing has been recovered from the Bank Negara forex losses.

A special task force report, AG report, PAC report, MACC investigation, PDRM investigation, and so on, were done on 1MDB but no such thing was done regarding Bank Negara’s forex losses.

Bank Negara’s forex losses were denied and quietly swept under the carpet as if it never happened while 1MDB is an open book.

There was nothing to gain from Bank Negara’s forex losses while 1MDB resulted in eight military bases, TRX, Bandar Malaysia, and development and economic activity that will go on for the next 20 years.

Once 1MDB’s businesses have fully matured the company will be showing a profit.

Furthermore, 1MDB raises its own cash from bank loans while the Bank Negara forex losses involved cash injection from the government.

Even the advance of RM3 billion that 1MDB sought from the government is to be repaid once 1MDB redeems part of its investments.

Now, all that is very clear and is well-documented.

Many investigations have been done and the answers have already been provided many times.

The same cannot be said about Bank Negara’s forex losses, though.

Mahathir, Anwar and Daim must come clean on the forex scandal.
Mahathir, Anwar and Daim must come clean on the forex scandal.

Did Bank Negara really lose US$10 billion playing the forex market or was some money actually pocketed and hidden under ‘forex losses’?

What was the actual loss?

Does even Anwar know?

Anwar’s job as finance minister was to cover Mahathir’s and Daim’s backs, which he did in 1993 and 1994 when he lied to Parliament.

In 1993, Anwar said there were no losses.

In 1994, he said it was only ‘paper losses’ and that the figure was very small.

On June 2, 2012, Penang Institute CEO, Zairil Khir Johari, said the losses amounted to RM30 billion (or about RM59 billion today).

Rosli Yaakop, the former deputy manager of Bank Negara, said the amount was US$5.5 billion (or about RM47 billion today).

Four days ago, Abdul Murad Khalid said it was US$10 billion (or about RM98 billion today).

Now, this was what Anwar said in 2012: “The forex fiasco was a major problem during my tenure as finance minister from 1991 to 1998. I was kept in the dark regarding the issue until things spiralled out of control and losses were colossal in 1994. Although the late Jaffar Hussein and Nor Mohamed Yakcop (at that time a Bank Negara employee) resigned shortly after, they did not receive any further punishment.”

Both Rosli and Anwar agree with Lim Kit Siang that a Royal Commission of Inquiry should be set up to establish the truth.

In fact, Anwar should come clean, since he said he was kept in the dark, and confirm that he was misled by Nor Mohamed Yakcop (Mahathir’s man) and the Bank Negara governor who took over from Jaffar Hussein, Ahmad Mohd Don (a Daim appointee).

Anwar cannot plead ignorance and if he really was ignorant that means he was admitting that the truth was hidden from him.

In that case, Mahathir and Daim made the right choice in appointing Anwar the new finance minister in 1991 since he was too dumb and was ignorant about what was going on around him.

It was Kit Siang who in 1993 first raised this matter in Parliament.

Of course, at that time Anwar Ibrahim, the then finance minister, denied this ‘rumour’ even though the western media had been reporting this matter for three years since 1989 (and at that time we had no internet: which means Anwar could get away with that lie).

So, did Anwar lie or was he lied to? Answers please!

In fact, Mahathir and Daim had made Anwar the finance minister in 1991 for this very specific purpose: to cover their backs and lie if necessary if the matter of Bank Negara’s forex losses ever gets discovered.

So, part of Anwar’s job specification is to take the heat off Mahathir and Daim, which he did in 1993.

But Najib is allowing this matter to surface, which is yet another reason why Mahathir needs him ousted.

In 1994, the stink was so great that it reached high heaven and Anwar could no longer deny it.

Lim Kit Siang once pounded on Mahathir and his government over  forex scandals.
Lim Kit Siang once pounded on Mahathir and his government over forex scandals.

So, when Kit Siang again raised this matter in Parliament in 1994, this time Anwar had to admit that Bank Negara did, in fact, lose some money but it was only ‘paper losses’ and not that large an amount: rugi sikit saja.

Today, we are being told that it was not paper losses and it was not rugi sikit saja but was actual losses amounting to US$10 billion or RM98 billion at today’s value.

Kit Siang treated the Bank Negara forex scandal as his personal crusade.

He demanded answers and the truth and asked for a Royal Commission of Inquiry (RCI) to be set up to get to the bottom of it and get the truth revealed.

Today new information is being revealed that is bringing us a bit closer to the truth.

But then this information contradicts earlier information so we need that RCI that Kit Siang proposed so that we can separate the wheat from the chaff.

The problem is, now that new information has surfaced, Kit Siang is no longer ranting, raving and screaming.

He is keeping very quiet because he has made a deal with Mahathir and he does not want to jeopardise this deal, which includes making him the deputy prime minister (DPM).

So Kit Siang is keeping very silent.

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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.