PUTRAJAYA: Datuk Seri Anwar Ibrahim believes Tan Sri Nor Mohamed Yakcop had overstepped his boundaries with regards to the foreign exchange (forex) trading scandal which affected Bank Negara Malaysia (BNM) in the 1990s.
Anwar, who is former Finance Minister, said he would have sacked Nor Mohamed if the latter had not stepped down on his own free will because of the "mess."
“When (then Governor) Tan Sri Jaffar Hussein said that he was going to step down because of this mess, I told him not to because I knew that it wasn't him that was at fault, it was Nor Mohamed,” he said.
Appearing as a witness at the Royal Commission of Inquiry (RCI) today, Anwar added:
“I told him that it was Nor Mohamed that should step down, which he did.
“But even if he had not, I would have sacked him.”
Anwar explained that Jaffar agreed with him that Nor Mohamed should step down but explained that he (Jaffar) also had to go as the governor of the bank as he had to take full accountability for the mess.
“I am well aware that Nor Mohamed had a big part in this and that's why I was very surprised when he was later made Finance Minister. I thought, how could this be when he cost the country billions in losses?” said Anwar.
It was at this point that RCI member, Tan Sri Saw Choo Boon asked Anwar if he agreed with Nor Mohamed’s statement that the forex losses was a valuable lesson to the country in withstanding financial challenges.
“Nor Mohamed Yakcop said that the forex scandal was a valuable lesson as it gave the country the crucial know-how on the formulation of the Unorthodox Measures, which helped us withstand the financial challenges during the 1998 Asian Financial Crisis.
"Do you agree with this?” Saw asked Anwar.
Amwar replied that he thought Nor Mohamed's reasoning was "absurd."
“I think what Nor Mohamed said was absurd because lessons should not cost billions of ringgit. We were supposed to manage public funds, and not turn it into lessons.”
Anwar was the 21st witness to take the stand in the ongoing RCI probe into the forex scandal of the 1990s, with losses amounting to some RM31 billion.
He was the only witness who came into the proceedings without a written statement and as such, was immediately cross-examined by conducting officer, Julia Ibrahim.
Anwar's cross examination, which took almost three hours to complete, was at times explosive as he defended himself against the RCI panel’s insinuation that he had withheld information from the Cabinet on BNM's total losses back in 1993.
“When you tabled the losses to the Cabinet in April 1993, you said that the losses amounted to RM5.7 billion,” said Julia to Anwar.
“As we know now, the total losses are bigger than that and you, Datuk Seri, also knew that the amount was bigger than the one you said in Parliament.”
Julia backed these allegations by bringing forward multiple letters and notes written by BNM as well as the Auditor General's (AG) Office to the Finance Ministry with regards to the forex trading activities.
“No, this is not true. I didn't know the total loss as those were written in letters while the notes were unofficial, unverified drafts from both BNM and the AG,” said Anwar.
“When I tabled to the Cabinet in April 1993, I was using the information from BNM's 1992 annual report, which was compiled by BNM and verified by the AG.”
RCI chairman Tan Sri Mohamed Sidek Hassan then said; “You claim you don't know but one of these letters from the AG had already informed you of the losses, even in 1992. How then do you claim that you didn't know of the losses?”
“Tan Sri, I am not an accountant by trade. When I was alerted of the losses and then later brief by Jaffar himself, it took me to four in the morning to look through all the documents,” said Anwar in reply.
“Yes I did receive letters and notes from BNM but these were unofficial drafts and I cannot, as the Finance Minister, brief my Cabinet based on information from drafts. I used the B
NM 1992 report which was compiled by BNM and verified by the AG.
“These were information that were true to me. In fact, the RM5.7 billion loss was still true me up till September 2012 when I quoted the same figures in Parliament again, this time as the leader of the Opposition.
“It wasn't until recently, that the figure was apparently wrong,” he added.
He went on to stress that the information given to him then was deemed true at the time; and to judge his actions then with the information that was just recently uncovered is not right.
“I did take the steps that were needed. I alerted the Cabinet with the verified information that I had from BNM and the AG and directed the bank to cease forex trading in April 1993.”
Anwar added that he and former Finance Ministry secretary-general Tan Sri Clifford Francis Herbert briefed then Prime Minister, Tun Dr Mahathir Mohamad on the losses before going to Cabinet, but did not receive any directions from Dr Mahathir on how to handle the forex scandal.
To this, Saw observed; “It seemed that you had taken this issue very seriously. Are you maintaining that you handled this on your own, without the help of your boss (Mahathir)?”
To this Anwar replied; “My boss was very supportive of me up until 1998,” which made the court erupt in laughter. Additional reporting by HANA NAZ HARUN