... the person who must also bear responsibility for the colossal Bank Negara forex losses, apart from Tan Sri Jaffar Hussein, must be the Finance Minister, Anwar Ibrahim, himself.
As Anwar had assured Parliament last April that he was ‘satisfied’ with Tan Sri Jaffar’s explanation for the 1992 Bank Negara forex losses, why had Tan Sri Jaffar done differently in 1993 with regard to the 1993 Bank Negara forex losses to require his resignation?
It was reported by FMT from RPK that Anwar covered the losses here. Below is what Raja Petra wrote further:
There are two other reasons why Anwar Ibrahim must bear personal responsibility for Bank Negara’s forex losses.
Anwar Ibrahim said last week that he had directed Bank Negara to stop forward foreign exchange trading when he discovered its forex losses 18 months ago. If Bank Negara had followed his instructions to stop forward forex trading in 1992, then how could Bank Negara suffer RM5.7 billion losses in 1993, on top of the RM10.1 billion to RM13.1 billion losses in 1992?
Furthermore, Anwar Ibrahim had misled Parliament last July when I questioned him whether Bank Negara had suffered more forex losses. Anwar said that this was not true as he had been monitoring the Bank Negara’s forex dealings weekly.
On July 19, 1993, I asked Anwar Ibrahim a supplementary question during question time as to whether at that date, Bank Negara’s provision of Rm2.7 billion contingent liability for forward forex trading in the 1992 Bank Negara accounts had not only been confirmed, but even more forex losses had been incurred.
This is Anwar’s reply, from the Hansard of 19th July 1993(p. 28):
“Dato Seri Anwar bin Ibrahim: Tua Yang di-Pertua, dukacita saya memaklumkan ini satu berita yang kurang baik bagi Yang Berhormat dari Tanjong. Kerugian yang dimaksudkan itu tidak berlaku dan tidak bertambah. Yang Berhormat mahu percaya atau tidak, tetapi saya ada maklumat yang sebenar tentang keadaan tersebut. Saya juga meneliti tiap-tiap minggu perkembangan kerana masalah yang dihadapi sebelum ini…. Saya ingin member jaminan kepada Yang Berhormat bagi Tanjong bahawa perkara ini kita teliti lebih dekat dan kita lebih waspada kerana pengalaman yang lalu.”
In this one short answer, Anwar Ibrahim had misled Parliament and the nation on three matters:
* that by July 1993, the provision in the 1992 Bank Negara accounts for RM2.7 billion contingent liability for forward forex trading had not been confirmed;
* that Bank Negara had not suffered more forex losses; and
* that his weekly monitoring of Bank Negara’s forex dealings would prevent further colossal losses arising from Bank Negara’s forward forex trading.
If Anwar Ibrahim claims that he had directed Bank Negara to stop forward forex trading 18 months ago, and that “there are no new trading arrangements” last year as the central bank unwound its forward positions in the market last year (Business Times April 6, 1994), then Bank Negara should not have incurred RM5.7 billion when its contingent liability provision for such forward forex trading in end- 1992 was RM2.7 billion.
Furthermore, there should not be another provision of RM1.4 billion as contingent Liability for forward forex trading for 1994 in its end-1993 Account.
As forward forex deals are usually for three or six months, this must mean that Bank Negara was still dealing in new forward forex trades at least until June 1993.
Anwar’s claim that there were no new forward forex trading by Bank Negara in 1993 had been contradicted by Tan Sri Jaffar Hussein, who said in his press conference on March 31 as well in his foreword to the 1993 Bank Negara report:
“In the Bank’s 1993 accounts, a net deficiency in foreign exchange transactions of RM5.7 billion is reported, an amount which will be written off against the Bank’s future profits. This loss reflected errors in judgement involving commitments made with the best of intentions to protect the national interest prior to the publication of the Bank’s 1992 accounts towards the end of March 1993. As these forward transactions were unwound, losses unfolded in the course of 1993. In this regard, global developments over the past year had not been easy for the Bank; indeed, they made it increasingly difficult for the Bank to unwind these positions without some losses. For the most part, time was not on the Bank’s side. Nevertheless, this exercise is now complete- there is at this time, no more contingent liability on the Bank’s forward foreign exchange transactions on this account. An unfortunate chapter in the Bank’s history is now closed. ”
This is an admission that until late March 1993, Bank Negara was still dabbling in new forward foreign exchange transactions, with the suggestion that after March, all these forward transactions were unwound.
But the provision of RM1.4 billion contingent liability for forward forex trading in the end-1993 account (Note 12) shows that new forex trading were still being entered into well after March 1993.
Clearly Datuk Seri Anwar and Tan Sri Jaffar are not telling the truth as to when Bank Negara ceased new forward forex trading.