BNM lost over RM30 billion in 1990s

PUTRAJAYA, 22 Aug 2017: 

Bank Negara Malaysia (BNM) suffered losses totalling RM31.516 billion in foreign exchange in 1991 until 1994, the Royal Commission of Inquiry (RCI) which was set up to investigate the losses, was told yesterday.

Former BNM accounts manager Abdul Aziz Abdul Manaf , 64, said the losses was stated in the central bank’s annual statement and that the amount was obtained while preparing the report on BNM’s foreign exchange losses from 1989 to 1994 following an order by former BNM governor Tan Sri Dr Zeti Akhtar Aziz in 2007.

He said the losses recorded for 1988 to 1989 was RM3.031 billion.

Abdul Aziz, who was reading his witness statement at the RCI proceeding, said he could not recall if the instruction from Zeti Akhtar was made orally or through a letter.

She asked me to gather all information on BNM’s foreign exchange dealings for that period and on April 18, 2007,  he completed the report and handed it over to Zeti Akhtar, said Abdul Aziz.

“Based on information fathered in the ‘Accounting Treatment of Losses Arising From Active Reserve Management 1988-1994’ dated 18 April 2007, I’m not sure if there was abnormal foreign exchange transactions because I was not involved in preparing the BNM’s annual report at that time.”

He said he was also not sure if there was a written policy at BNM on foreign exchange transactions.

Meanwhile, former BNM internal auditor Datuk Ahmad Hizzad Baharuddin, who was the second witness  to testify, said he received instruction on April 1993 to file a report on the cause of the losses incurred by BNM.

Ahmad Hizzad, 54, said the reason the report was prepared was not to identify the parties responsible for the losses, but to identify measures to address the problem.

He said there was a written policy at BNM at that time on foreign exchange dealings, but he could not remember the details.

“There exist a  check and balance system at BNM on foreign exchange dealings, but it was not enough.”

Ahmad Hizzad said he was also made to understand that there was an External Reserve Committee (ERC) set up by BNM to regulate and monitor foreign exchange dealings by the bank.

Dealers were given up to US$125 million, but there was no limit set for adviser/manager in BNM’s Bank Department on foreign exchange dealings, he added.

On June 21 this year, the cabinet unanimously agreed on the setting up of RCI to investigate the foreign currency losses of RM10 billion by BNM in the 1990s.

The panel includes commission’s chairman Tan Sri Mohd Sidek Hassan, Special Task Force to Facilitate Business co-chairman Tan Sri Saw Choo Boon, High Court judge Datuk Wira Kamaludin Md Said, Bursa Malaysia Bhd chief executive officer Datuk Seri Tajuddin Atan and Malaysian Institute of Accountants member K Pushpanathan.

– Bernama

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