The central bank had allegedly barred Second Finance Minister Nor Mohamed Yakcop from working in any financial institutions but that apparently did not affect his professional career.

Former Bank Negara official and PAS leader Rosli Yaakop claimed the directive was issued after Nor Mohamed was allegedly identified as 'one of the culprits' behind the nearly RM30 billion losses incurred by the bank due to foreign exchange (forex) speculation in the early 1990s.

Despite this, Rosli was puzzled as why the government chose to punish him by promoting him in top government posts a few years after he was forced to quit.

After leaving Bank Negara, Nor Mohamed moved on to, among others, high positions with financial institutions Rashid Hussain Securities and the Abrar Group International. He was later recalled to Bank Negara as special adviser to the government.

In January 2004, Prime Minister Abdullah Ahmad Badawi, who is also finance minister, appointed him second finance minister.

Rosli, who was Bank Negara's economics department deputy manager until 1994, claimed that forex market experts fingered Nor Mohamed as among the key players behind the speculation schemes.

"Many central bank officers laughed when it was announced that he was appointed (second finance minister). This guy, who had led to almost RM30 billion in losses," he said when met yesterday.

From outcast to adviser

Following the 1997-98 Asian financial crisis, Nor Mohamed returned to Bank Negara and was put in charge of the formulation and implementation of the 'peg exchange rate'.

"That job changed his fate - from being an 'outcast of the central bank' to 'trusted economic adviser of (then) prime minister (Dr Mahathir Mohamad)," said Rosli, who is also PAS Negri Sembilan chief.

Nor Mohamed's astounding comeback is among the factors that have lend credence to the allegation that he was backed and protected by high government leaders for his 'illegal' speculation activities, he added.

Rosli said he considered Nor Mohamed's speculation activity as illegal because they went against currency market norms and practices as well as Bank Negara's internal regulations and policies.

In an exclusive interview with malaysiakini last week, former deputy premier Anwar Ibrahim claimed that Mahathir and former finance minister Daim Zainuddin were also responsible for the losses.

Rosli lamented that no high-level inquiry was carried out on the fiasco and proposals for the case to be probed by an investigating body were rejected.

"Many have asked - how can someone with such a tainted record be now sitting in the cabinet?" he added.

Rosli was referring to the complaint made more than 12 years ago by Opposition Leader Lim Kit Siang in Parliament on the government's failure to come clean on the colossal losses.

The call was reiterated early this month when the issue of Bank Negara's forex losses re-emerged after Umno-linked tycoon Tajudin Ramli made a number of allegations in a counter law suit.

Following this, Lim called for a royal commission of inquiry to reveal the culprits who had caused the losses.

Yesterday, malaysiakini reported that Bank Negara's late former governor Jaffar Hussein was also one of the alleged architects of the scandal.

Another legacy

Meanwhile, Rosli said 'another legacy' of Nor Mohamed during his tenure in Bank Negara was the internationalisation of the ringgit, which had made it vulnerable to attacks from currency speculators in 1997-1998.

"Bank Negara itself later admitted that 'the rapid increase in the internationalisation of the ringgit since April 1989 also contributed to the ringgit's weakness during this period," he said, citing the central bank's 1998 annual report.

He said that the speculative exercise and the subsequent losses incurred sow the seeds to the devastating attack on the economy in 1998.

Rosli also listed several questions that has remained unanswered more than a decade after the scandal.

  • Why did Bank Negara engage in forex market speculative activities?

  • Did the nation's top leaders acquiesce to Bank Negara's speculative activities?

  • Why was Nor Mohamed, then an advisor at Bank Negara, given full powers to trade in foreign currencies?

  • What was the role of the central bank's foreign reserves management committee at the time?

  • How much losses were exactly incurred on account of the speculative activities?

  • Was there any criminal element in the management of foreign reserves?

  • What steps has Bank Negara taken to avoid a recurrence of the incident?