‘IT’S REALLY ABOUT RM9BIL. JAAFAR TOLD ME TO INFORM THE AUDITOR-GENERAL.. TO SAVE MALAYSIA’S REPUTATION, SAVE THE COUNTRY’: RCI WITNESS RECOUNTS EX-BNM GOVERNOR SHOCKED REACTION TO 1990s FOREX LOSSES

THE late Bank Negara Malaysia (BNM) governor, Jaafar Hussein, had expressed disbelief when first told of “huge losses” of about RM9 billion suffered by the central bank’s trading arm, a former contract auditor told the inquiry panel probing BNM’s losses from foreign exchange trading in the 1990s.

A worried Jaafar later ordered a second look into central bank’s accounts, which came back to the same amount of losses, witness Lee Siew Kuan told the Royal Commission of Inquiry (RCI) today.

Lee, 85, had been hired as a contract officer by deputy governor Lin See Yian, and was “tasked solely to clear up scandals” involving about 20 cooperatives in early 1987.

He had retired the previous year as director of audit, also known as assistant auditor-general, in the National Audit Department.

As a contract officer with BNM, Lee only reported to Lin and Jaafar. Lee’s contract with the central bank ended in 1993.

Lee said he was not a permanent staff of BNM and did not receive reports on the foreign exchange losses, neither did he attend any of the central bank meetings.

Much of his testimony today was unclear on dates and names. Lee could not place which year Jaafar was told of the losses, but remembers how the latter reacted.

“I can’t recall what year, but Tan Sri Jaafar Hussein requested me to look into the accounts of Bank Negara Malaysia.

“Subsequently I checked with the Accounts Department, and was told by the accountant, whose name I can’t remember, who informed me that there were big losses suffered by Bank Negara Malaysia in the forex transactions,” Lee said.

“Immediately, I informed the governor about the huge losses.”

Lee said Jaafar was “shocked” and “did not believe” him and said the “losses could not be that much”.

He said he reported the matter only to Jaafar, “so he could do something about it”.

Jaafar asked Lee to have “a second look” into the accounts.

“After taking a second look at the accounts, I met and informed (Lin) about the huge losses suffered by Bank Negara Malaysia in the forex transactions amounting to about RM8-9 billion,” Lee said.

Both men later went to brief Jaafar, who “accepted the losses”.

“Tan Sri Jaafar did not say anything and looked worried and shocked.

“It is really about RM9 billion. The governor said ‘Can you help me?’. I said, ‘why?’.

“He told me, ‘Please inform the auditor-general (of) the loss’,” Lee added.

“So, I went there and saw the auditor-general (Ishak Tadin) and told him, ‘I think we have a big loss in BNM. And I think it is about RM9 billion. The governor asked me to see you and tell you about it. To save Malaysia’s reputation. Save the country’.”

THE MALAYSIAN INSIGHT

.