The US$10 billion Forex robbery and the great cover-up

By MT Webmaster Last updated Apr 17, 2017

In 1992, P. Kanason, the Assistant Auditor General, went to England to investigate the Bank Negara Forex scandal. After gathering all the evidence, he brought the matter to the attention of Ainum Saaid. She then discussed the matter with Daim Zainuddin and after that she told Kanason to back off ‘on instructions from above’. The Attorney General, Abu Talib Othman, said the Forex trading was ultra-virus to the Bank Negara Act. He then wrote to Bank Negara but the matter was buried and no further action was taken.

THE CORRIDORS OF POWER

Raja Petra Kamarudin

Not many Malaysians knew at that time that Bank Negara Malaysia was the biggest Forex gambler in the world. This secret surfaced only in 1993 when the then Opposition Leader, Lim Kit Siang, raised the matter in Parliament. The then Finance Minister, Anwar Ibrahim, however, denied the ‘malicious lies and rumours’.

Internationally, though, this story had been ‘hot news’ for three years and the Auditor General’s office had also received quite a bit of information. So they started investigating the matter further. P. Kanason, the Assistant Auditor General, went to London to meet the Bank of England officials and was alarmed at what he discovered. Not only was there massive wrongdoing and losses, but also a large amount of these losses were hidden and window-dressed using ‘creative-accounting’ methods.

In short, many more crimes were being committed to cover the Forex crime.

After gathering all the evidence, Kanason brought the matter to the attention of the Attorney General’s Chambers, the department that decides if any crime has been committed and, if so, whether to take action. Kanason met Ainum Mohamed Saaid who said she will look into the matter and get back to him.

Ainum then brought the matter to the attention of her ‘boss’, Tun Daim Zainuddin, who spoke to Tun Dr Mahathir Mohamad. When Kanason went to meet Ainum for further instructions, she told him, “Orang atas cakap jangan campur tangan.” That instruction could only have come from Daim who Ainum went to see.

Kanason was perturbed with Ainum’s response because he had been very thorough in his investigation, which took him as far away as to London. His principles would not allow him to just bury a matter that he considered extremely criminal. Faced with this ‘wall’, Kanason went to meet Abu Talib Othman, the Attorney General, to present his case and show him all the evidence he had gathered.

Abu Talib, who had been Attorney General for more than ten years, knew his job and was known as a man who is very thorough and meticulous. After carefully studying Kanason’s papers, Abu Talib said that the Forex trading was ultra-vires to the Bank Negara Act. He told Kanason he would write to Bank Negara to seek clarification but nothing happened after that. Whether that letter is going to surface during the RCI hearing or whether it will remain buried — or the RCI will be told the letter never existed — remains to be seen.

Meanwhile, Daim had already tipped off Mahathir about the matter, who in turn told Abu Talib to back off. Soon after that Abu Talib retired.

The three who helped ‘burn’ US$30 billion in Forex gambling and planned the cover-up later

By 1994 the losses became so huge that the matter could no longer be denied. Even Kit Siang at that time was not aware that the losses were in the region of US$10 billion. He thought it was merely RM10 billion or less, maybe even just RM7-8 billion. And this was because the losses were very cleverly hidden and what Parliament was told is that they were merely ‘paper losses’.

Parliament was also told that the culprit for the Bank Negara Forex losses, Bank Negara Governor Jaafar Hussein, had already been punished and had, in fact, resigned from the bank. Jaafar was actually just the fall-guy and Kit Siang said so. According to Kit Siang, the real culprits were Prime Minister Tun Dr Mahathir Mohamad and Finance Minister Tun Daim Zainuddin.

Dr Rosli Yaakop, the then Deputy Manager of Bank Negara, has since gone public to reveal what many had suspected all along. Mahathir and Daim were behind this crime. Anwar replaced Daim as Finance Minister so that he could help cover up the crime. Jaafar was just the fall guy. And Kanason, who was so frustrated because he had enough evidence of a crime, but was told by Ainum to back off, took early retirement. And as a reward for this cover-up, Ainum was later made the Attorney General in 2000.