TM, TNB share transfers to bail out Bank Negara done discreetly, RCI told

(NST) – The share transfers of Telekom Malaysia Bhd and Tenaga Nasional Bhd (TNB) to Bank Negara Malaysia (BNM) in order to bail the latter out of insolvency back in 1994 was ordered to be done discreetly.

This directive for discretion was made by the then “higher-ups of the Ministry of Finance (MOF)”, former Deputy Finance Secretary at the Finance Department of MoF, Datuk Othman Jusoff told the Royal Commission of Inquiry (RCI) yesterday.

Othman, 69, however claimed that he could not remember who exactly made the directive as it happened too long ago.

He maintained that he could not remember despite multiple promptings from conducting officer Datuk Suhaimi Ibrahim.

“You were the one who took notes of these meetings in which the decision was made to transfer Telekom Malaysia and TNB’s shares. You made a note that it should be done discreetly and yet you said, you can’t remember,” said Suhaimi to Othman.

Othman then responded that he really couldn’t remember as it happened 25 years ago.

He continued that he wouldn’t have remembered making the notes himself if he was not presented with the documents that stated that he did so during the RCI proceedings.

The notes that Othman and the Panel were referring to were notes taken in a meeting conducted on 24 November 1994 and was attended by representatives from BNM (inclusive of former assistant governor Datuk Abdul Murad Khalid) representatives from MoF (inclusive of former finance ministry secretary-general Tan Sri Clifford Francis Herbert) as well as representatives from the Auditor General Office.

The purpose of the meeting was to discuss how the MoF could help bail out the then insolvent BNM.

It was decided then that the share buyback of TM and TNB’s shares had to be done to prevent the central bank from slipping into further losses, which at that point was somewhere north of RM8 billion.

The share transfers of both companies were to be done discreetly through Rashid Hussein Securities Sdn Bhd (now known as the RHB Group).

RCI panelist Datuk Wira Kamaludin Md Said then asked Othman if the total losses of RM31 billion were revealed at this meeting; to which the latter said no.

“And you didn’t ask? There is a directive to bail out BNM but you didn’t ask how much they lost?,” continued Kamaludin, incredulously.

“I was a low ranking junior officer, I didn’t ask questions. I just took notes,” said Othman in reply.

RCI panel member Datuk Seri Tajuddin Atan then stepped in; “Before this meeting, have there, to your knowledge, been any meetings being held where BNM came to MoF seeking help?,” to which Othman said no.

“Is it safe then to summarize that the people who needed to know already knew. Discussions had already been made with all parties concerned and next level of authority had been informed of this “packet” (the share transfers of Telekom Malaysia and TNB)?,” continued Tajuddin to Othman.

After a pause, Othman replied with a simple “Yes.”

Othman was the first witness called at yesterday’s proceedings and the 22nd overall.