FORMER Bank Negara advisor Tan Sri Nor Mohamed Yakcop must be investigated for he may be mainly liable for criminal breach of trust (CBT) over the central bank’s funds during the forex losses in the 1990s.
The RCI report found evidence that suggested a possible CBT offence under Nor Mohamed’s supervision and direction.
It said Section 30(1)(d) and (m), Section 4 and Section 28 of the Central Bank Ordinance stated the direction of law by which BNM’s funds in relation to its external reserves were to be discharged.
“As adviser of the banking department and as affirmed from evidence of witnesses and documents sighted by the Commission, he clearly had dominion over the funds.
“His actions in the handling of the forex dealings violated the direction of law prescribing the way BNM’s reserves must be managed,” said the report, adding that there was basis that Nor Mohamed might have committed CBT over the fund.
The RCI also found no evidence – even from his own testimony – that Nor Mohamed had sought approval from higher management before giving such instructions to the dealers.
The report added that he had made excessive speculative trading, which exposed the funds to high risk.
“This fact is also supported by the findings in the Internal Audit Report, all of which are testament to the various ways that he had violated the direction of law entrusted upon him.
“Due to the approach taken by him, various reserves of BNM had to be used to cover the losses from forex dealings,” it said.
The report suggested for a formal investigation to confirm Nor Mohamed’s liability under Section 406 or 409 of the Penal Code.
Others listed for joint liability alongside Nor Mohamed include the late Bank Negara Governor Tan Sri Jaafar Hussein and its board of directors at the time.
Tun Daim Zainuddin, the report said, had denied any knowledge of the forex dealings, their nature and purpose, the forex losses in 1988 and 1989 or of any change in BNM’s policy on forex dealing – all the while claiming that the Auditor-General’s observations were never brought to him.
However, the report found his statement to contradict the legal provisions over to his position as Finance Minister.
“If he had really been ignorant of the affairs of BNM which had caused billions of losses in his tenure, then he had seriously failed in his statutory duty to the nation.
“Had he been more responsible and exercised more supervision, the excessive or speculative forex dealings could have been halted earlier and the losses incurred would be lesser or contained,” it said.
By leaving BNM to its own devices over its forex dealings, Daim had, by omission, aided and abetted Nor Mohamed’s CBT, it said.
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