The ghost of the multi-billion ringgit Bank Negara forex speculation scandal, perhaps the largest financial scandal in Malaysian history, has returned with a bank negara forex scandal to haunt the masterminds. I remember this mother of all banking scandals well.
In the case of the Bank Negara forex gambling scandal, billions of ringgit were lost. No one outside the corridors of power knows for sure but it left Bank Negara splattered with red ink. And as usual, there was no accountability to the public. Nor Mohamed Yakcop, the then Bank Negara advisor in charge of the investment department. He quit after arriving late at the House of Lords: Would our frequently absent MPs do likewise? His revelation merely confirms the suspicions of many. G-5 finance ministers in New York City, the US dollar fell sharply causing major losses in Bank Negara’s dollar reserves.
December 1988 speech in New Delhi. In the late 1980s, Bank Negara under Governor Jaffar Hussein, was a major player in the forex market. Asian markets came to realize the influence Bank Negara had on the direction of forex market. Alan Greenspan acting the Federal Reserve chairman later realized Bank Negara’s massive speculation activities and requested the Malaysian central bank to stop it. In response, bankers began front running Bank Negara’s orders.
Two years later, Bank Negara attempted to defend the value of the British pound against attempts by George Soros and others to devalue the pound sterling. George Soros won and Bank Negara reportedly suffered losses of more than USD 4 billion. Like a dormant volcano whose time to re-erupt has come, the controversy involving the central bank’s infamous speculative practices blew up with such a shudder last weekend that even Tun Dr Mahathir Mohamad was called to respond. Mahathir, who was prime minister at the time, commented to reporters that he was not afraid to be investigated. The Opposition can open any file they had on him, he said in response to DAP adviser Lim Kit Siang’s assertion that Pakatan Rakyat, should it take over the federal government, must initiate a royal commission of inquiry into the affair. Other key figures reportedly implicated are the then finance minister Tun Daim Zainuddin and BNM governor during that period, the late Tan Sri Jaffar Hussein. A fourth person, the then BNM deputy governor, Tan Sri Nor Mohamed Yackop, is now a minister in the Prime Minister’s Department.
Although the issue has been raised before, this time it was perhaps more damning and detailed. This is because the individual who spoke about it at a forum organised by the Penang Institute, a state government think-tank, on Saturday was privy to the internal happenings at BNM until 1994. Dr Rosli Yaakob was a senior manager during the crucial years when the speculative practices were said to occur, and was even on the panel that prepared and presented the bank’s semi-annual brief. He is currently Negri Sembilan PAS deputy commissioner. Incidentally, Opposition Leader Datuk Seri Anwar Ibrahim, who was finance minister from 1991 to 1998, also spoke at the forum. Anwar maintained that the matter was kept from him after he assumed the post.