FORMER Bank Negara Malaysia (BNM) assistant governor Nor Mohamed Yakcop is likely to be the next focus of the Royal Commission Inquiry (RCI), which is investigating the losses incurred by the central bank more than 20 years ago.

Nor Mohamed resigned from BNM along with the governor, the late Jaafar Hussein in 1994, after the forex losses became public.

In his testimony today to a five-member RCI panel led by Petronas chairman Mohd Sidek Hassan, former Bank Negara Malaysia (BNM) assistant governor Abdul Murad Khalid said Jaafar was unaware of the scale of the losses.

His 21-page statement today, which took 30 minutes to read, was peppered with mentions of Nor Mohamed.

Murad said Nor Mohamed was a manager of BNM’s Banking Department in connection with foreign exchange (forex) trading in the 1980s and also BNM adviser on forex trading from 1991 to 1993.

Murad took over Nor Mohamed’s forex responsibilities as BNM adviser “somewhere between the end of 1992 (and) early 1993”.

Murad blamed Nor Mohamed for failing his duties.

“Mr Nor Mohamed Yakcop should have reported and was responsible (for answering) to the deputy governor, that is Tan Sri Lin See Yin and also to Tan Sri Jaafar Hussein regarding the forex trading that was carried out by BNM in the 1980s and from 1990 to 1993.

“As far as I know, there is no written policy by Bank Negara Malaysia regarding forex trading. The practice then, regarding forex trading, was determined by the manager of the Banking Department and adviser, that is by Mr Nor Mohamed Yakcop,” Murad said.

He also said there was a lack of checks and balances in the forex trading department during the period Nor Mohamed was in charge.

He added that when he took over from Nor Mohamed, he found the total exposure in forex trades amounted to US$150 billion. BNM had a reserve of US$20 billion then.

Murad revived the forex scandal in January when said in an interview with The New Straits Times that the central bank racked up almost US$10 billion (then RM25 billion) in foreign exchange trading losses by 1992, a figure that dwarfs the official RM9.3 billion of losses disclosed by BNM in 1994.

Upon the recommendation of a special task force established after Murad’s revelation, the Prime Minister’s Office (PMO) announced on June 21 that a Royal Commission of Inquiry (RCI) will be formed to investigate the forex losses.

Nor Mohamed was questioned by the task force in May.

Despite the scandal, he was appointed as special economic adviser to former prime minister Dr Mahathir Mohamad and later went on to serve as second finance minister in the Abdullah Ahmad Badawi administration.

Murad said the losses in the early 1990s amounted to US$10 billion or about RM25 billion then. BNM, in its 1994 annual report said the losses amounted to RM9.3 billion.