by Parliamentary Opposition Leader, DAP Secretary-General and MP for Tanjung, Lim Kit Siang, in Petaling Jaya on Friday, 1st April 1994:
DAP calls for a Royal Commission of Inquiry to conduct full investigations as to how Bank Negara could have suffered another RM 5.7 billion foreign exchange lost last years in succession.
Bank Negara Governor, Tan Sri Jaffar Hussein, yesterday admitted that Bank Negara has suffered another RM 5.7 billion foreign exchange loss last year- the second year in succession.
For 1992, Bank Negara admitted that it lost RM 9.3 billion from foreign exchange, although the losses could be as high as RM 14 billion because of various accounting techniques that could have been used to disguise the true amount.
This raise the question whether the actual Bank Negara losses for 1993 was also higher than the RM 5.7 billion publicly admitted by Bank Negara.
For instance, Bank Negara suffered a loss of RMm 712 million in its ordinary operations last year- the first time in Bank Negara history. In 1992, Bank Negara recorded an operating profit of RM 1.39 billion as compared to RM 1.2 billion operating profit for 1991.
As compared to 1992, Bank Negara would have suffered a loss of about RM 2 billion from its operations in 1993.
Last year , when the Bank Negara’s colossal forex losses were made public, Bank Negara Governor, Tan Sri Hussein Jaffar, made shocking statements when he said that the forex losses were “paper losses” and that “Bank Negara’s loss is the nation’s gain”!
If Jaffar is right that “Bank Negara’s loss is the nation’s gain”, then he should be leading a nation-wide celebration that Bank Negara had recorded another RM 5.7 billion forex losses last year, instead of saying “For the losses I take full responsibility”and hinting about his resignation.
However, what is most shocking is retrospect is that Jaffar’s explanations and positions last year was fully defended by the Finance Minister, Datuk Seri Anwar Ibrahim, especially in the DAP emergenvy motion in Parliament on the Bank Negara forex losses on 27th April 1993.
Anwar Ibrahim must also bear responsibility for the RM 5.7 billion Bank Negara forex losses for 1993
In giving full support for Bank Negara’s forays into the forex markets, Anwar said in the DAP emergency debate in Parliament last April that he would “always defend Bank Negara’s right to indulge in business activities in order to enhance its reserves.”
For this reason, it is not only the Bank Negara Governor and those involved down the line in Bank Negara who must take responsibility, the Finance Minister himself must take responsibility, especially for the RM 5.7 billion forex losses last year.
When replying to my speech in the Parliamentary debate in April last year, Anwar said that the Bank Negara’s RM 2.7 billion contingent liability for 1993 “does not represent a loss and it is simply a commitment on the part of the bank to meet any contingency in forward commitments of the bank and this could result in a loss, gain or a neutral position.”
Anwar Ibrahim should explain how the RM 2.7 billion forex contingency liability for 1993 has now ended up in a RM 5.7 billion forex loss for the year!
The other reason why Anwar must bear full responsibility for the Bank Negara forex RM 5.7 billion forex losses last year is that he had given an assurance to Parliament last April that he would be making regular monitoring of Bank Negara’s forex dealings.
The country and the government must take a very serious view of the forex losses suffered by Bank Negara which could be in the region , of RM 20 billion for 1992 and 1993. This figure is delivered when we take into account that Bank Negara’s forex losses in 1992 could range from RM 10.1 billion to RM 14 billion; and that in 1993, it could range from RM 5.7 billion to more than Rm 7 billion.
RM 20 billion Bank Negara forex losses must rank as the greatest financial scandal in Malaysian history
Jaffar has described these two years as “an unfortunate chapter in the Bank Negara’s history ”. The loss of RM 20 billion by Bank Negara is not just “an unfortunate chapter” in its history, but must rank as the greatest financial scandal in Malaysian history.
Jaffar blames the greatest financial scandal in Malaysian history to “errors in judgement” and that no fraud was involved.
Are Malaysians to be content with these three-word explanation for the RM 20 billion Bank Negara losses?
This will be a supreme test of the commitment of the Finance Minister, Datuk Seri Anwar Ibrahim, to the principles of accountability and transparency- as to whether he is prepared fo r a full investigation as to how Bank Negara could llse some RM 20 billion in two years, although such investigations might also reflect adversely on his own judgement and decisions!
In view of the magnitude of the Bank Negara losses in 1992 and 1993, DAP calls for the establishment of a Royal Commission of Inquiry to conduct full investigations as to how Bank Negara could have suffered RM 20 billion losses in two years.
Anything short of such a Royal Commission of Inquiry would be a mere sweeping of the greatest financial scandal in Malaysian under the carpet and completely unacceptable.
The Cabinet next Wednesday should take the bold decision to establish such a Royal Commission of Inquiry.