THE ROYAL Commission Royal Commission to Enhance the Operations and Management of the Royal Malaysian Police took more than a year to complete its work.

It was commissioned by (Tun) Abdullah Ahmad Badawi in 2004, when he was Prime Minister. It was headed by the former Chief Justice of Malaya, (Tun) Mohamed Dzaiddin Abdullah.

The Royal Commission Royal on the Bank Negara foreign exchange (forex) trading losses has three months to complete its task. It is the handiwork of the Prime Minister, (Datuk Seri) Mohd Najib Abdul Razak.

It is headed by the former Chief Secretary to the Government and the current Chairman of Petronas, (Tan Sri ) Mohd Sidek Hassan.


The Dzaiddin Commision took more than a year to complete


One year vs three months and Dzaiddin vs Mohd Sidek. Dzaiddin took more than a year to come up with 125 recommendations and Mohd Sidek took a handful of days to conclude that someone would be charged as a result.

The Dzaiddin commission was to find the truth and fix the problems. Mohd Sidek’s commission was to dig up something that happened 30 years ago and had been attended to.

The Sidek Commission has three months to complete its task

The former was for the better good of the country. The later looks and smells like a political witch hunt to discredit the growing opposition to the Umno-BN government.

Dzaiddin spent much of his career on the bench. He was assisted in the commission by a former Lord President (Tun Salleh Abbas), the former IPG (Tun Haniff Omar), a high court judge, the Bar Council Chairman, a senior lawyer, a journalist, an academic, a former opposition MP, a social activist and head of a think tank.

Mohd Sidek on the other hand is an administrator. He is assisted by high court judge (Kamaludin Md Said), Bursa Malaysia chief executive officer (Tajuddin Atan), co-chairperson of the special task to facilitate business (Saw Choo Boon), accountant and former Ernst & Young partner (K. Pushpanathan) and Finance Ministry’s strategic investment department secretary (Yusof Ismail).

Readers and debaters of this blog can judge for themselves the vast differences between the two RCIs.

The Murad Factor

For the protagonist of the Forex commission, the former Bank Negara Assistant Governor, (Datuk) Murad Khalid, his is self preservation cloaked in the name of truth and justice.

A close friend of his, who is a good friend of mine, told me that he was seeking to “clear his name”.

But why now – 17 years later? Does he truly believe that he can ride on the gullibility of the Najib Administration to achieve his personal goals?

Murad hit the spotlight when, on 6 Nov 2000, he was fined RM500,000 or in default six months jail by the Kuala Lumpur Sessions Court.

According to an Utusan Malaysia report, he was found guilty of failing to declare shares and properties belonging to his company.

An Utusan Malaysia report about Murad being fined

He pleaded guilty to the charge of failing to provide accurate particulars of the shares of Ben Harta Sdn Bhd and 51 properties worth about RM24 million at Bank Negara Malaysia, Jalan Dato Onn, at 11.56am on Aug 20 1999.

The Ben Harta shares were held by his nominees, Gan Hong Sing @ Lan Hong Sing and Gor Sor Ting. Murad was surprisingly wealthy for a salaried person working for Bank Negara.

It is recalled that Murad had made a statutory declaration accusing (Datuk Seri) Anwar Ibrahim of corruption. It was investigated by the Anti-Corruption Agency (ACA), the forerunner to the MACC, and was found to be baseless.

Murad had appeared before the commission and implicated Anwar once again. Anwar had responded via a press statement dated August 24 asking to appear before the commission to rebut Murad’s charges.

Other Players

Apart from Murad, other important players from Bank Negara were (Tan Sri) Nor Mohamed Yakcop, who was in charge of the forex department during the period, and the late (Tan Sri) Jaffar Hussein, who was the governor.

But always bear in mind that although Bank Negara is a government institution, it operates independently of the government. It even determines its own salary scheme.

It was on this basis that (Tan Sri) Zeti Akhtar Aziz, when she was the governor, recommended that 1MDB be charged for flouting forex rules in relation to the transfer of billions of ringgit in and out of the country. But it was turned down twice by Najib’s Attorney General, (Tan Sri) Mohamed Apandi Ali.

Apandi holding his “infamous” charts cleared Najib of 1MDB scandal

During the 1997/98 Asian Financial Crises, its then governor (Tan Sri) Ahmad Mohd Don and deputy governor, (Datuk) Fong Weng Phak, opposed the exchange control proposal by then Prime Minister, (Datuk Seri) Dr Mahathir Mohamad. They resigned in protest.

And since currency trading, being one of the most specialised of Bank Negara’s activities, it could not have been the day-to-day concern of any Prime Minister or Finance Minister.

In the case of the 1990’s forex activities, the key player was Nor Mohamed. He was blamed for the losses and was removed from the bank. But the person who ultimately paid the price was then governor, the late Tan Sri Jaffar Hussein. He took full responsibility for the losses and resigned.

Every central bank worth its salt dabbles in currency trading to protect its national currency and, in some instance, to make profit. Bank Negara is no exception and, on occasions, it did make profit.

But there had been cases of rogue currency traders getting intoxicated on their cloak and dagger game with hedge funds that they gambled away billions of dollars of their banks’ money.

Incidentally, at about the same time that Nor Mohamed was playing up the Bank Negara forex trading, an American bank, Allfirst Bank was shifting its forex operations from a merely hedging endeavor to one that would yield profits and boost its bottom line. It hired a little known currency trader by the name of  John Rusnak.

According to reports, Rusnak seemed adept at matching options with forward contracts to hedge against risk. He bet on the yen and lost a total of US$691 million. His bank was robust enough to take the losses but he was found guilty and sentenced to seven and a half years in prison plus a fine of US$1 million.

For years before the debacle, Bank Negara was seen as an active player in the currency market mainly to protect the value of the ringgit as part of its role as the custodian of the monetary system. Monetary stability is one of two key objectives of Bank Negara.

Who Would Be Blame?

Nor Mohamed is by all account the main figure. He is the man at the centre of the storm. The most convenient way out for him is to blame Jaffar. After all Jaffar had solely accepted the blame.

But I don’t think Nor Mohamed would do that. It’s too convenient and would not go down well with the public. He’s more likely to point fingers at the former Prime Minister, Tun Dr Mahathir Mohamad, and at Anwar.

That’s what Najib wants. But that would make him an absolute traitor to the man who gave him his life back. Had it not been for Dr Mahathir, he would have remained a pariah in the financial world.

Instead, for telling Dr Mahathir how those billions were lost, he was appointed Dr Mahathir’s Special Economic Adviser and was partially credited with implementing the exchange control during the 1997/98 Asian Financial Crises.

Obviously Dr Mahathir and Anwar are very important witnesses. Both men had said they love testify. The question is would the Commission dare to call them.

I am not surprised if they are not called. The whole idea of having the commission could be blown to bits should the two men testify.

The dilemma for the Commission is, whether or not it calls Dr Mahathir and Anwar, the two men could go public with their side of the story elsewhere.

I don’t envy Mohd Sidek and his merry men. They are squeezed between a rock and a hard place.

They are professional people whereas the whole idea of the RCI is political. No matter what they come up with, their credibility and professionalism will be put to question.

Most Malaysians don’t even know or care about the event when it happened 30 years ago because it did not cause them hardship nor put the country’s finances in jeopardy. The losses were acknowledged and steps were taken to amortized them over a period of time.

On the contrary, Bank Negara reserves declined more drastically between June 30, 2014 and June 30, 2017 – from US$131.86 billion to US$98.92 billion – representing a drop of US$32.94 billion.

Was it due to attempts to protect the ringgit, paying debts, capital outflow or a more sinister reason? Whatever the case is, Bank Negara never sleeps. Forex activity is a 24-hour business.

– kadirjasin.blogspot.m