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QUESTION TIME | Three people collectively knew of what exactly transpired in Malaysia’s RM31.5 billion foreign exchange losses, but the demise of one of them results in a missing piece of evidence which would have provided the link in the chain of accountability as to who was ultimately responsible.

Even as the first casualty of the Royal Commission of Inquiry (RCI) into Bank Negara Malaysia’s (BNM) foreign exchange losses occurs, it is clear that the commission has not established much going by the proceedings which ended two days ago.

If the political intention in the setting up of this inquiry, or inquisition as some have called it, is to ascribe blame to and imply benefit to some – especially the prime minister at the time, Dr Mahathir Mohamad – it has not been conclusive.

But the extent of the losses to the country is clear – RM31.5 billion between 1991 and 1994, given to the RCI by a BNM staff member. Even this piece of vital information was in the public realm for some time, although it is good to have clear confirmation now.

The difference between the situation at BNM (highly irregular and speculative trading by the central bank) and 1MDB (alleged theft) are quite different even if the amounts involved are of the same order of RM30 billion. No one except the counterparties to BNM’s trade, including currency trader George Soros, benefited from the massive positions taken by BNM.

It was also established that there were attempts to hide the extent of losses, widely reported at the time to be just RM5.7 billion, going by the deficiency in shareholders’ funds of BNM for 1993. In fact, the RCI was told by a BNM official that several papers involving the losses were classified under the Official Secrets Act. But it was not established who decided to classify the documents.

There were gaps in terms of the chain of command that led to the losses which the RCI was not able to fill. Former Bank Negara advisor Nor Mohamed Yakcop said he accepted his fair share of accountability over the foreign exchange (forex) losses incurred in the late 1980s and early 1990s.

But he said he never discussed the forex transactions in the years between 1986 and 1993 with both the then finance minister Anwar Ibrahim and prime minister Mahathir, which if true, absolves them of blame for the losses.

"The forex losses occurred, there is no denying it. There is also no denying my accountability for the forex losses. I accepted my fair share of the accountability and resigned from Bank Negara.”

Nor Mohamed became the first casualty of the RCI as he resigned his deputy chairman’s position at Khazanah Nasional Bhd, the government sovereign fund which he had helped nurture back into capability and trust starting in 2004 under previous prime minister Abdullah Ahmad Badawi.

He had been under political pressure to finger Mahathir over the forex scandal but he steadfastly refused to do so...

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