by Parliamentary Opposition Leader, DAP Secretary-General and MP for Tanjong, Lim Kit Siang, in Petaling Jaya on Monday, 19th September 1994:
PAC should present, the report of its investigations into the RM30 billion Bank Negara for ex losses to Parliament, when it meets on October 17.
I welcome the meeting of the Public Accounts Committee (PAC) tomorrow to investigate into the RM30 billion Bank Negara forex losses.
The new PAC Chairman, Datuk Dr. Jamaluddin Jarjis should ensure that, the PAC report of its investigations into the RM30 billion Bank Negara forex losses is presented to Parliament when it meets on October 17, so that the Dewan Rakyat could have a full debate on the PAC report.
There are at least five aspects of the colossal Bank Negara forex losses which the PAC should investigate and report to Parliament, namely:
1. The real losses suffered by Bank Negara as a result of its speculation in the forward foreign exchange markets since 1992;
The Government had only admitted that Bank Negara had suffered RM5.7 billion forex losses, in 1993. It had not, admitted that Bank Negara suffered forex losses of RM9.3 billion in 1992 – claiming that these were mere ‘paper losses’.
I had said in Parliament that Bank Negara’s forex losses could total RM30 billion, and the PAC must, establish the hill magnitude of die-losses suffered by Bank Negara from its forex speculations.
2. The truth of the statement by the Finance Minister, Anwar Ibrahim that he had directed Bank Negara to stop forward exchange trading when he discovered its forex losses around October 1992.
If this was true, why then did Bank Negara continue to suffer forex losses in 1994 when forward forex commitments are usually for three-month or six-month contracts. Even if Bank Negara had been so imprudent as to speculate with one-year deals, all such forward foreign exchange contracts should have been wound up by 1993 itself.
3. Whether it is true that at the height of Bank Negara’s speculation in the, forward foreign exchange market in 1992, Bank Negara’s maximum exposure was in the region of RM270 billion – three times the country’s GDP and more than five times the country’s foreign reserves at the time!
4. The assurance given by Anwar Ibrahim in Parliament on July 19, 1993 that Bank Negara had not suffered any ‘new or increased forex losses’ as he was ‘examining Bank Negara’s developments every week’. If this was the case – then how could Bank Negara lose RM5.7 billion by the end of December 1993?
5. For how long had Bank Negara indulged in forward foreign exchange speculation, the total profits it had made since it started its forays into the forward forex speculations, and the real nature of the ‘unfortunate circtunstances and errors of judgement’ which caused such colossal losses to Bank Negara and the Malaysian taxpayers.
Bank Negara’s RM30 billion forex losses scandal is the greatest financial and banking scandal in Malaysian history. This scandal is compounded by the fact that the RM30 billion have all been lost outside the country. If the losses, had been incurred inside Malaysia, at least RM30 billion could circulate within the country and bring some benefit to Malaysians.