FORMER prime minister Dr Mahathir Mohamad is expected to testify this afternoon in the royal commission of inquiry into Bank Negara Malaysia’s forex losses 25 years ago.

The Malaysian Insight learnt that Dr Mahathir is scheduled to speak about his role as prime minister during the 1980s until 1994, when BNM suffered billions in forex losses.

He was prime minister from 1981 to 2003. The 92-year-old is expected to maintain that he did not know the extent of the losses early on or that he concealed them from the public.

He is also expected to speak about the relationship between the prime minister’s office and BNM’s administration and likely answer allegations that he had dismissed the losses.

Dr Mahathir gave his statement last Friday, after RCI-appointed police officers interviewed him for two hours at Yayasan Al-Bukhary.

However, the statement may be parsed into two sections due to certain issues raised by the former prime minister, his lawyer, Mohamed Haniff Kathri Abdulla said earlier.

Dr Mahathir now chairs the opposition coalition Pakatan Harapan. Opposition lawmakers have described the inquiry as politically motivated.

The RCI hearings will end on Wednesday. The panel, led by Petronas chairman Mohd Sidek Hassan, will present its findings to the Yang di-Pertuan Agong on October 13.

The Malaysian Insight is covering the RCI live:

10.03am: Testimony by Othman Yusuf, the former secretary of the finance department in the MoF ends. The next witness, former finance minister Daim Zainuddin, prepares to take the stand.

The RCI takes a break due to a faulty sound system.

10.19am: Proceedings continue with Daim as the 23rd witness. The 79-year-old was finance minister from 1984 to 1991.

Daim said BNM became active in forex trading from 1988 onwards.

He added that the bank governor then, the late Jaffar Hussein, never discussed with him in detail about forex dealings by BNM’s trading arm.

Daim also said he never spoke with the prime minister about BNM’s forex dealings.




9:49am: Former finance minister Daim Zainuddin arrives in the courthouse.

9.43am: Witness Othman Yusuf, the former secretary of the finance department in the MoF, tells the RCI what the meeting between BNM and MoF in late November 1994 decided.

“The sale of government-owned shares are to be done ‘quietly’ via Rashid Hussein Sdn Bhd,  ” he said.

The RCI conducting officers ask what “quietly” (senyap-senyap) means.

Panel member Tajuddin Atan asks if the “next level of authority” was informed of such a decision. He also asked if what BNM was doing was to ask MoF for resources (to keep the bank’s reserves afloat).

Othman nodded in response.

9.38am: Othman said he had recommended that BNM draft a letter of undertaking to the MoF on the RM8 billion shortfall. Asked by the RCI conducting officer what this type of letter meant, Othman replied:

“BNM is a government agency. When an agency is in such trouble, the government should be prepared to help out. The question what the government is willing to do to help BNM.”

He added that the purpose of the meeting between BNM and MoF was to “assist” the central bank.

“The purpose of this meeting was for the government to assist BNM in relation to the losses faced by the bank by transferring shares held by the government in certain companies to the central bank,” he said.

This meeting, Othman said, was held in late November 1994 and was attended by the bank deputy governor, Treasury secretary-general Clifford Herbert and former assistant governor Abdul Murad Khalid.

Othman said he could not recall who was the bank’s deputy governor at the time.

9.26am: Panel member Bursa Malaysia CEO Tajuddin Atan asked the witness if a discussion on BNM’s forex losses was discussed with the Ministry of Finance (MoF) for the first time in December 1993.

Othman said: “Yes”.

He added that BNM had suffered a shortfall of RM8 billion at the time and he (Othman) had reported in a meeting that the central bank may be insolvent unless its reserves were bolstered.

9am: The hearing starts with Othman Yusuf, the 22nd witness to take the stand. He was former deputy secretary and then secretary of the finance department in the Ministry of Finance.

He said he worked with the former ministry deputy secretary-general (II) Clifford Herbert in late 1993 to transfer shares to keep BNM’s reserves afloat.