A Royal Commission of Inquiry (RCI) could help reveal more details on the foreign exchange losses suffered by Bank Negara Malaysia in the 1980s and 1990s, which are far more than what has been disclosed, said Mohd Sidek Hassan.

The chairman of the Special Task Force (STF) to probe the bank’s forex losses expressed confidence that its investigation learned that “the figure is greater than what was disclosed”.

However, the STF was unable to scrutinise further, due to the limitations that it had, he said in an interview with selected media on Friday.

“As a task force, we have limitations. We were established on an administrative basis and not under any legislation. As such, the STF had no powers to coerce anyone to come forward for any discussion or to give any information,” he explained.

The STF only had access to documents that were available to the public, for an example BNM’s annual reports and consultations between Bank Negara Malaysia (BNM) and the International Monetary Fund.

“We also cannot compel anyone to come forward. Even if you ask them to come and they don’t want to come, there is no issue about it. And even if they came and we questioned them, and they refused to answer we cannot do anything about it.”

“And it is not under oath. Even if they answer, we don’t know if that is the truth. So, that is why the RCI is better, although it is safe to say that the STF has reason to believe that the actual loss is different and much more than the figures given earlier,” said Sidek, a former chief secretary to the government.

However, the RCI could do it, he said, adding that it could have access to documents relating to the foreign exchange losses, for instance, from the Ministry of Finance (MOF) or BNM. 

On Jan 26, former BNM assistant governor Abdul Murad Khalid revealed that the BNM suffered US$10 billion in foreign exchange market losses in the early 1990s, much higher than the figure of RM9 billion disclosed by BNM.

Subsequently, a seven-member STF headed by Sidek was formed in February.

Sidek, who is Petronas chairman, said the STF focused on the three points in the terms of reference, one of which was conducting preliminary investigations into losses by BNM related to its speculative foreign currency transactions.

It also investigated whether there was any action to cover up the losses and whether the cabinet and Parliament were misled, and it had to submit to the government recommendations for further action, including the establishment of an RCI.

Prima facie case

On June 21, the STF submitted its findings, concluding that it found that a prima facie case existed to merit in-depth investigations by establishing an RCI.

Explaining the process of the investigation, Sidek said a total of 12 people, including former BNM governor Zeti Akhtar Aziz, was interviewed by the STF, and all cooperated well.

Asked if there were individuals who were called up but did not come forward, he said: “Of those called, not many did not want to come forward. Those who did not turn up had their reasons like perhaps they had forgotten.”

Among the others who were summoned by the STF were PKR advisor Anwar Ibrahim, DAP advisor Lim Kit Siang as well as former Finance Minister II and BNM assistant governor at the time, Nor Mohamed Yakcop.

Asked on the need to investigate something that happened about two decades ago, Sidek said that though it took place a long time ago, it had been revealed and it had been stated that the losses were huge.

“I feel that the people need an explanation on the matter, and the government had decided to conduct an investigation.

“Therefore, an RCI is the only way for a complete understanding.

“If this is not done now, the matter will prolong. In the future, five or 10 years from now, it will crop up again. With a full investigation through an RCI, there could be closure to this.”

- Bernama