DR Mahathir Mohamad never entered the foreign exchange trading room in Bank Negara Malaysia’s London office, a former forex dealer told the royal commission of inquiry (RCI) today.

Azman Mat Ali, 54, said the central bank’s London office was where the bulk of foreign exchange trading took place.

In his statement, Azman said Dr Mahathir was not informed of the forex losses when the latter opened the London representative office.

Mohamed Haniff Kathri Abdulla, Dr Mahathir’s lawyer, asked Azman to confirm that the opening ceremony occurred before Azman was assigned to London.

“I don’t know. I don’t need to know… It was none of my business,  ” Azman said in reply to Haniff’s question on how big the delegation that accompanied Dr Mahathir was and how long the ceremony took.

“At the time, you were doing the trading, in Kuala Lumpur, would you agree with me that Tun Dr Mahathir, never entered that trading room?” Haniff asked, to which Azman replied, “No”.

Azman said that all forex dealers based at the central bank’s London office answered to the chief dealer and Nor Mohamed Yakcop, who was then manager of the banking department and central bank adviser.

Although he was aware that the bank was suffering huge losses in forex trading by the early 1990s, he said dealers were not privy to the exact figure, and trusted that their higher-ups knew what they were doing.

“We (the dealers) in the bank, we were trying to do our best. We were trying to serve Tan Sri Nor Mohamed (Yakcop), We were going to help him. We would do anything for him.

“If we knew if (anything we did) was wrong, on hindsight, we would have gone out of our way to do something  ,” Azman told the RCI on its sixth day of hearing.

RCI panellist Tajuddin Atan asked whether there was a culture of complacency or fear of raising the losses to a higher authority.

Azman, who served as a foreign exchange dealer with Bank Negara Malaysia (BNM) from 1988 to 1998, however, said his job merely involved contacting counter parties in Singapore, Tokyo, Sydney, London and New York to execute the transactions as directed by the chief dealer or Nor Mohamed.

He said repeatedly that no one other than the chief dealer and Nor Mohamed were in the know of the extent of the losses.

Asked why the central bank engaged in speculative forex trading, Azman replied: “Speculation is about risk appetite… speculation is a subject of debate. I think the question is more for Nor Mohamed, not for me”.

Asked to come up with a figure of the losses, Azman said: “At my level, we were never privy to the level of losses. But it would be safe to say the losses were huge”.

He eventually conceded that trading losses may have eventually exceeded the central bank’s reserve.

Azman said dealer limits were between US$5 million and US$10 million.

“Dealers were to trade on their own and to comply with the approved limit and the lost limit.”  

Azman said the limit for the chief dealer was “higher” but could not recall what it was.

“However, the buy and sell transactions carried out by dealers on behalf of Bank Negara’s management is based on instructions given by the chief dealer and (Nor Mohamed) and as far as I recall, there is no limit for those transactions,” he said.

Azman said the forex trading may reach “billions” in a month under the chief dealer or Nor Mohamed. Pressed by the RCI panellist Kamaludin Md Said, Azman settled on a figure of US$1.5 billion as a possible amount that could have been traded in a day.