PUTRAJAYA: Former Prime Minister Tun Dr Mahathir Mohamed’s reaction was blasé when told that the foreign exchange (forex) losses suffered by Bank Negara Malaysia (BNM) were around RM30 billion in 1993.
This was informed by former Ministry of Finance Deputy Secretary General (II) Tan Sri Clifford Francis Herbert to the Royal Commission Inquiry (RCI) investigating BNM's forex losses in the 1980s and 1990s.
Herbert, 76, who was the 14th witness during the proceedings, which has entered its fourth day, said Dr Mahathir's reaction was quite normal when the then Finance Minister Datuk Seri Anwar Ibrahim and himself briefed him about the losses suffered.
When asked by conducting officer, Julia Ibrahim, on whether the RM30 billion amount was definite, Herbert answered that it could have been slightly higher than that.
He said he only came to know about the losses in late 1993 when he was instructed by Anwar, who was then the Minister of Finance.
"We briefed Dr Mahathir about the losses suffered by BNM and he responded by saying sometimes we make profits and sometimes we make losses," Herbert said.
He also testified that he did discuss with Tan Sri Jaafar Hussein, who was then the governor, to prepare a note for Anwar to reply (about the losses suffered) in Parliament.
He added that Jaafar told him that most of the Central Banks at that point of time made losses on forex transactions as the forex market was very volatile.
Herbert also told the commission that Anwar agreed that Tan Sri Nor Mohamed Yakcop, who was then the bank department advisor, should resign from BNM as he was to their knowledge the person responsible for losses suffered by BNM.
He also said in about late 1993 or early 1994, he met Tan Sri Lin See Yan who was then the deputy governor of BNM and was told that BNM was basically insolvent largely due to the forex losses.
The RCI proceedings will continue on Sept 6.