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Why police investigation on forex losses will amount to nothing

QUESTION TIME | Once the Royal Commission of Inquiry (RCI) on the forex losses recommended that an investigation is carried out to determine if former prime minister Dr Mahathir Mohamad and his deputy then, Anwar Ibrahim, had concealed facts from the cabinet, it became obvious that they don’t have anything on the two.

The commission's report, released on Nov 30, said that the pair had likely abetted Nor Mohamed Yakcop, the Bank Negara Malaysia advisor then and the person responsible for the forex trades, and hid certain facts from the cabinet.

The RCI had recommended that Nor Mohamed is investigated for criminal breach of trust (CBT) under Section 409 and for contravening the Central Bank Ordinance 1958. The commission also accused former finance minister Daim Zainuddin of abetting Nor Mohamed in committing CBT. Daim was finance minister until 1991, after which he was replaced by Anwar.

That basically means that the RCI has no solid evidence to say that all those mentioned above were guilty of any offences under the Penal Code or the Central Bank Ordinance 1958, but instead bowed out tamely by saying the police should investigate further.

That’s nothing new or radical. A quarter of a century ago, all those who were following the foreign exchange scandal, which lost the country RM31.5 billion, but at that time was passed off as a loss of RM5.7 billion, still knew that much had to be investigated. How could a central bank be so careless as to speculate to the tune of billions of ringgit and lose so much of money? We did not need an RCI to tell us that 25 years later.

To help launch the police investigations, RCI secretary Yusof Ismail made a police report at the Putrajaya district police headquarters. "The report is based on the RCI's investigations. We found that there is a possibility of wrongdoing by those involved in the forex dealings then.

"After this, police will hand over their report to the Attorney-General's Chambers for further action," Yusof said.

But the police investigations are not going to be easy, with the inspector-general of police already saying they are likely to be lengthy. If the RCI, which is composed of an array of experts with various backgrounds, can’t find enough to finger anyone, are the police going to be any better?

I could not find a reference in press reports to any specific provision of the Central Bank Ordinance which was violated. That absence indicates there is not enough specificity as to the offence. The RCI mentioned Section 409 of the Penal Code which reads as follows:

“Whoever, being in any manner entrusted with property, or with any dominion over property, in his capacity of a public servant or an agent, commits criminal breach of trust in respect of that property, shall be punished with imprisonment for a term which shall not be less than two years and not more than twenty years and with whipping, and shall also be liable to fine.”

But what is CBT, and how is it related to the forex losses? Section 405 of the Penal Code defines it as follows...

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