BARISAN Nasional is inviting a backlash if it goes ahead and prosecutes Dr Mahathir Mohamad for the central bank’s forex losses of 30 years ago, because the public consensus is that the inquiry into the affair was politically motivated, say analysts.

The royal commission of inquiry (RCI) was initiated after Dr Mahathir became a fierce critic of Prime Minister Najib Razak, they said, adding the Najib administration was showing inconsistency in the setting of its priorities.

They said the Najib administration had doggedly pursued the business of Bank Negara’s foreign exchange losses that occurred decades ago, but was sluggish in its reaction to the loss of billions in the 1Malaysia Development Bhd (1MDB) scandal that blew up a mere two years ago.

“Take Dr Mahathir to court and BN will suffer an electoral backlash as he is still widely and deeply respected for building modern Malaysia,” said independent political analyst Dr Andrew Aeria, former associate professor at Universiti Malaysia Sarawak.

Hisommuddin Bakar of the Ilham Centre said the RCI seemed to be politically motivated because there is no action taken on the 1MBD scandal.

“BN can’t use the RCI as ammunition. It is ammo that has no impact,” said Hisommuddin.

And if BN were to use the RCI findings to tar rival coalition Pakatan Harapan – of which Dr Mahathir is chairman – it could even backfire, said Dr Faisal Syam Hazis.

“BN has lost the legitimacy to talk about good governance, transparency, and corruption,” said Faisal of Universiti Kebangsaan Malaysia (UKM).

“There are so many allegations against people in the government yet there is no action against them. But when it comes to the opposition, action is swift and efficient,” said Faisal.

Speedy RCI

The RCI tabled its 524-page report in Parliament yesterday which found that Bank Negara Malaysia had lost RM31.5 billion in foreign exchange trading between 1992 and 1994.


The RCI recommended that police investigate Dr Mahathir, former finance minister Anwar Ibrahim, a member of the BNM board of directors, the National Audit Department and the Finance Ministry.

RCI secretary Dr Yusof Ismail has lodged a police report in Putrajaya in connection with the commission’s recommendations.

Critics have questioned the speed and efficiency of the government’s probe into the forex losses compared to the losses in 1MBD, and federal agencies Mara and Felda.

The probe into the forex losses began with a special task force in February. In April, they recommended that the Najib administration set up a RCI.

The RCI’s hearings were conducted in June during which 25 witnesses including Dr Mahathir, Anwar, former Finance Minister DAim Zainuddin and Bank Negara adviser Noor Mohamed Yakcop were summoned.

The report was submitted to the Yang di Pertuan Agong Sultan Muhammad V on October 13, about seven months after the probe was launched,

In contrast, the police have yet to complete their investigations into 1MDB despite the many revelations of fraud and money laundering that began coming to light in mid-2015.

Attorney-General Mohd Apandi Ali declared that there was insufficient evidence in an investigation by the Malaysian Anti-Corruption Agency (MACC) on whether money was siphoned from the state fund.

The lack of punitive action in Malaysia over 1MBD is in sharp contrast to Singapore, which has jailed bankers and shut down the branches of two foreign banks for funneling 1MBD money.

Meanwhile the United States authorities have frozen and sought to seize more than US$1 billion in expensive properties and artwork believed to have been bought with money stolen from 1MDB.

study by anti-graft body C4 into 1MBD’s deals and losses concluded that the company was set up to specifically steal billions from Malaysians.


Faisal, of UKM, said the RCI would be one of several issues that would be trotted out as the general election nears to enable the BN to question PH’s credibility.

Najib has to call for GE14 before August but signals from the administration are that it will likely take place in March or April.

“Dr Mahathir has a lot of baggage during his 22 years in power, such as Ops Lalang. So it’s no secret that we will see more of such issues being unearthed,” said Faisal.

Aeria says that even if the forex losses were to be used as an issue, the PH could turn it around and use it against the BN.

“A court case will also open avenues for PH to question why PM Najib cannot also be queried in court over 1MDB.”

Hisomuddin of the Ilham Centre said any attempt to prosecute Dr Mahathir could attract sympathy votes from undecided voters, who make up 30% to 40% of the electorate.

“As it is, the RCI had no traction among people when we were doing a survey in Kuala Selangor, Sungai Besar and Tanjong Karang. Because it is a complex issue and it happened so long ago that people don’t feel connected to it.”