‘Jaffar informed of 1990s forex losses’

PUTRAJAYA: Former Bank Negara Malaysia (BNM) governor Tan Sri Zeti Akhtar Aziz said she learnt about the central bank’s foreign exchange (forex) losses after a meeting in London with the bank’s senior officers.

She said the late BNM governor, Tan Sri Jaffar Hussein, was informed of the central bank’s massive exposure at the meeting with assistant governor Datuk Abdul Murad Khalid.

“As far as I remember, Abdul Murad did not have the details regarding the foreign exchange transactions,” she said.

The meeting was held at the London apartment where Jaffar was staying in 1992.

Zeti, 70, said Dr Awang Adek Hussin was also present at the meeting.

“Jaffar responded by saying that it was probably gross positions that were known by the counter parties that BNM traded with.

“These counter parties would not be aware of the net positions of the bank and he was of the view that the net positions were very much less,” she said.

Zeti, who is the 16th witness, was testifying on the fifth day of the Royal Commission of Inquiry (RCI) to investigate losses incurred by BNM from foreign exchange dealings in the 1990s.

In reading out her witness statement, Zeti said based on information in a report “Accounting Treatment 1988-1984”, dated April 18, 2007, the total loss was RM32.074bil after taking into account the profit of RM2.473bil for the year 1990.

The witnesses: (From left) Zeti, Nor Mohamed Yakcop and Ainum.

Zeti said Jaffar took accountability of the forex losses in a very honourable way and he resigned.

The governor has to take full accountability for anything that happened, just like in a commercial bank, and if something happened, whether (one) knew it or not, one had to be accountable, she said.

Former BNM adviser Tan Sri Nor Mohamed Yakcop, 70, who also testified, said he could not remember the profits and losses in the forex transactions between 1986 and 1993.

He added that he did not at any time between 1986 and 1993 discuss Bank Negara’s forex transactions with the-then finance minister Datuk Seri Anwar Ibrahim and then prime minister Tun Dr Mahathir Mohamad.

Earlier, former Attorney-General Ainum Mohd Saaid, 71, told the RCI the Attorney-General’s Chambers did not fully accept the way the BNM interpreted the law regarding foreign currency transactions.

She said the Attorney-General’s Office received a letter dated Feb 9, 1990, from BNM for her attention (she was then Head of the Advisory Division) titled “Foreign Exchange Transactions By Bank Negara”. — Bernama