FOREX RCI | A former bank special assistant to the Bank Negara governor said the central bank's then governor, the late Jaffar Hussein, was "shocked" when he was informed of the foreign exchange losses.

Testifying before the Royal Commission of Inquiry (RCI) tasked to investigate the losses, Lee Siew Kuan, 86 – who was offered a position by former deputy governor Lin See Yan as a contract officer to Bank Negara in 1987 – said Jaffar had initially requested him to look into the central bank's accounts.

"I checked with the accounts department and was told by the accountant informing me that there were big losses suffered by Bank Negara in the forex transactions.

"Immediately I informed the governor about the huge losses, but the governor did not believe me and said the losses could not be that much."

Lee said Jaffar (photo) then instructed him to take a second look at the accounts, after which he met Lin to inform the latter about the losses.

"The losses amounted to about RM8 to RM9 billion. Later Lin and myself went to brief Jaffar."

Accepting the losses, Lee said Jaffar had looked "worried and shocked."

"I told him, 'I'm just reporting to you because no one reported it to you'.

"The governor said 'Can you help me? Please inform the auditor general about the losses'," said Lee.

He said he then informed former auditor-general (Ishak Tadin) about the losses.

"I told him the governor asked me to see you and to tell you about it. To save the country, Malaysia's reputation."

As nobody had apparently informed the governor about the losses, Lee said he took it upon himself as the governor's special assistant to tell him.

Asked by panel member Tajuddin Atan whether it was the first time Jaffar came to know of the losses, Lee said: "He just couldn't believe it, he was shocked."

The RCI has been tasked with determining the veracity of allegations surrounding the forex losses incurred by Bank Negara and its implications on the national economy, among others.

It is expected to complete its probe within three months from the date of its setting up on July 15 and thereafter submit its report to the Yang di-Pertuan Agong.