Government announces RCI on 1990s forex losses

(The Star) – The Government has officially announced the formation of a Royal Commission of Inquiry (RCI) to investigate the foreign exchange (forex) losses suffered by Bank Negara Malaysia in the 1990s.

The Prime Minister’s Office said in a statement on Tuesday that Yang di-Pertuan Agong Sultan Muhammad V approved the formation of the RCI, as well as matters related to its membership and scope of duties.

The RCI will be chaired by former chief secretary to the government Tan Sri Mohd Sidek Hassan, who previously headed the special task force formed in February to perform an initial probe into the losses that allegedly amounted to billions of ringgit.

Mohd Sidek will be assisted by five other members – High Court judge Datuk Wira Kamaludin Md Said, Bursa Malaysia chief executive officer Datuk Seri Tajuddin Atan, Special Task Force to Facilitate Business (Pemudah) co-chairman Tan Sri Saw Choo Boon, Malaysian Institute of Accountants member K. Puspanathan, and Finance Ministry strategic investment division director Datuk Dr Yusof Ismail.

 “The appointment of Sidek as the chairman and Saw as a member of the RCI is in order to establish continuity as the pair were part of the special task force on the same issue before,” said the PMO.

It added that the other members were appointed based on their qualifications and experience in areas closely related to the investigation being conducted by the commission

The RCI will be responsible for verifying the allegations that Bank Negara had experienced significant losses resulting from foreign currency transactions in the 1990s and its implications to the national economy.

It will investigate if Bank Negara’s involvement in the forex activities had contravened the Central Bank Ordinance of 1958 and whether there were any attempts to conceal or withhold information regarding those losses with the intention to mislead the Cabinet, Parliament and the people at the time.

The RCI will then propose actions that should be taken against the parties that were directly or indirectly involved in the case if they are found guilty of causing the massive losses.

The commission is expected to complete its investigation in three months, effective from the date of its formation, and will then present its findings to the Yang di-Pertuan Agong.

The special task force led by Sidek had last month presented its preliminary findings to Cabinet, which then unanimously agreed to set up the RCI.