Forex for a trader
Bank negara forex scandal wiki

Bank negara forex scandal wikiThe Wastage of Taxpayer Funds Report. The forex scandal in early 90s. Estimated losss: As high as RM30 billion! Some of you may have heard of the case of Nick Leeson whose exploits as a financial trader caused the spectacular collapse of the British bank Barings in 1995. He was based in Singapore and was making unauthorized speculative trades on the Japanese stock prices and interest rates. Unfortunately for him, the Kobe earthquake struck and caused the Asian markets to plunge resulting in Leeson and the bank losing more than US$1 billion. Barings could not sustain such a hugh loss and was declared insolvent. Leeson was eventually jailed 4 years for fraud and forgery in Singapore. The case above illustrates the high risks involved in trading in financial instruments. Large profits can be made but monumental losses can result if the trades go sour. A few years earlier in 1992-1993, Malaysia’s very own Bank Negara was also involved in risky forex trading which landed it in serious trouble and resulted in a loss estimated to be as high as RM30 billion. It is not clear exactly when such activities started but bank was supposed to have the most sophisticated trading rooms in the world which impressed Mahathir who was the PM then when he toured the trading rooms.

He had given approval for Bank Negara to continue its speculative currency trading after he was informed about it. Bank Negara’s forex trading activities were well-known at that time and a source of concern to banks across Asia. “It became the most awesome currency trader in the world” said the author of the book “Vandals’ Crown: How Rebel Currency Traders Overthrew the World’s Central Banks.” On some days, it traded US$1 billion to US$5 billion which is very unusual. Even the Bank of Japan rarely traded more than US$1 billion and only when it had wanted to intervene in the foreign exchange market to protect its currency. Central banks normally enter the forex market only to influence its own currency rate. However, Bank Negara was trading in other currencies and was profiting from their movements. In other words, it had become a profit centre for the government using the country’s reserves to speculate in the currency market. Surely, that is not the role of a central bank. Why is Bank Negara undertaking such profit-making activities putting the country’s reserves at great risk? Just like in the Nick Leeson’s case, it just needed an unfavorable event to cause monumental losses. Bank Negara was holding large positions betting on the pound sterling to go up. However, Britain withdrew from the European Exchange Rate Mechanism causing the sterling to collapse. This resulted in losses estimated to be between RM16 billion and RM30 billion in just 2 years in 1992-1993. Can you imagine how much is RM30 billion? If you strike the first prize in the lottery draw of RM3 million – every single draw of the year and every year for 80 years you will get near to that astronomical figure! Up to this day, a full account and disclosure of the forex fiasco has not been forthcoming despite the persistent efforts of Lim Kit Siang in bringing up this issue in parliament on many occasions.

The following is his favourite quote from the Vandal’s Crown by Gregory J. Millman: “Using all the resources a central bank commands – privileged information, unlimited credit, regulatory power, and more – Malaysia’s Bank Negara became the most feared trader in the currency markets. By trading for profit, Bank Negara committed apostasy against the creed of central banking. Instead of working to ensure global financial stability, Bank Negara repeatedly shoved huge sums of money into the most vulnerable market situations in order to destabilize exchange rates for its own profit” (p.226) “(Bank) Negara operated behind a thick veil of secrecy. The bank seldom spoke publicly about its controversial trading activities. Yet it was increasingly clear to foreign exchange traders that Bank Negara’s operations in the foreign exchange markets went far beyond simple self-defense. It became the most awesome currency trader in the world.” (p. 227) “(Bank) Negara’s market manipulation was so egregrious that one American central banker said, ‘If they tried this on any organized exchange in the world, they’d go to jail.’ However, in the unregulated international currency markets, there were neither police nor jailers. The only rule was the rough justice of the vandals, and it was this rule that eventually brought (Bank) Negara down.

“In 1992, (Bank) Negara took on a large pound sterling position, apparently expecting Britain to maintain the discipline required by the European Exchange Rate Mechanism. It was a bad economic and political judgement. (Bank) Negara lost approximately $3.6 billion when Britain withdrew from the ERM, letting sterling collapse. The next year, (Bank) Negara lost an additional $2.2 billion. By 1994, Bank Negara was technically insolvent and had to be bailed out by an infusion of fresh money from Malaysia’s finance ministry.” (p.229) When will the country get the whole story of this biggest financial scandal in its history? Specifically, when will we get answers to some of these questions: Why was Bank Negara speculating in the risky forex market to make profits? Was it a proper policy for a central bank to use country’s reserves to make profits? Who was reponsible for authorising such activities? What were the limits on how much of the bank reserves can be used for currency speculation?

Were these limits adhered to? Was the cabinet aware that the country’s reserves were used for such risky speculation? Wasn’t there a mechanism to monitor the currency trading? Why wasn’t serious actions taken against those responsible for such huge losses? List of Malaysia scandals. List of Malaysia scandals include: Excesses and wastages: The Bank Bumiputra twin scandals in the early 1980s saw US$1 billion (RM3.2 billion in 2008 ringgit) 3 The Maminco attempt to corner the world tin market in the 1980s is believed to have cost some US$500 million. (RM1.6 billion) 4 Betting in foreign exchange futures cost Bank Negara Malaysia RM30 billion in the 1990s. See Bank Negara Malaysia#Recent history Perwaja Steel resulted in losses of US$800 million (RM2.56 billion). Eric Chia, was charged with corruption for allegedly steering US$20 million (RM64 million) to a Hong Kong-based company 5 Use of RM10 billion public funds in the Valuecap Sdn. Bhd. operation to shore up the stock market 6 Banking scandal of RM700 million losses in Bank Islam, see Bank Islam Malaysia The sale of M. V. Agusta by Proton for one Euro making a loss of €75.99 million (RM 348 million) 78 Wang Ehsan from oil royalty on Terengganu RM7.4 billion from 2004 – 2007 9 For the past 10 years since Philharmonic Orchestra was established, this orchestra has swallowed a total of RM500 million 10 The government has spent a total of RM3.2 billion in teaching Maths and Science in English over the past five years. Out of the amount, the government paid a whopping RM2.21 billion for the purchase of information and computer technology (ICT) equipments which it is unable to give a breakdown. 11 The commission paid for purchase of jets and submarines to two private companies Perimeker Sdn Bhd and IMT Defence Sdn Bhd amounted to RM910 million. 12 RM300 million to compensate Gerbang Perdana for the RM1.1 billion “Crooked Scenic Half-Bridge” 13 RM1.3 billion have been wasted building the white elephant Customs, Immigration and Quarantine (CIQ) facilities on cancellation of the Malaysia-Singapore scenic bridge 14 RM 100 million on renovation of Parliament building and leaks 15 National Astronaut Programme – RM 40 million, see Angkasawan program National Service Training Programme – yearly an estimate of RM 500 million 16 Eye on Malaysia – RM 30 million and another RM5.7 million of free ticket 17 RM 4.63 billion, ’soft-loan’ to PKFZ, see Port Klang Free Zone, 1819 RM 2.4 million on indelible ink 20 Samy announced in September 2006 that the government paid compensation amounting to RM 38.5 billion to the highway companies. RM 380 million windfalls for 9 toll concessionaires earned solely from the toll hike in 2008 alone. 2122 Two bailouts of Malaysia Airline System RM7.9 billion 23 Putra transport system, which cost RM4.486 billion STAR-LRT bailout costing RM3.256 billion National Sewerage System costing RM192.54 million Seremban-Port Dickson Highway costing RM142 million Kuching Prison costing RM135 million Kajian Makanan dan Gunaan Orang Islam costing RM8.3 million. Le Tour de Langkawi costing RM 3.5 Million Wholesale distribution of tens of millions of shares in Bursa Malaysia under guise of NEP to cronies, children and relatives of BN leaders and Ministers worth billions of ringgits. APs scandal had been going on year-after-year going back for more than three decades, involving a total mind-boggling sum of tens of billions of ringgits Alienation of tens of thousands of hectares of commercial lands and forestry concessions to children and relatives of BN leaders and Ministers worth tens of billions of ringgits Travel around Malaysia and see for yourself how many white elephants like majestic arches, roads paved with fanciful bricks, designer lamp posts, clock towers, Municipal Council buildings that looks more like Istanas, extravagant places of worship, refurbishment of residences of VIPs, abandoned or under-utilised government sports complexes and buildings, etc! Combined they could easily amount to the hundreds of billions of ringgits!

Wastages and forward trading of Petronas oil in the 1990s based on the low price of oil then. In Time Asia magazine issue on March 15 2004, South East Asian economist at Morgan Stanley in Singapore Daniel Lian, figures “that the country may have lost as much as U$$100 billion (RM320 billion) since the early 1980s to corruption.” Bank negara forex scandal wiki. Updated 1 year ago · Published on 20 Apr 2017 8:20PM · 0 Comments. DE facto opposition leader Anwar Ibrahim was today escorted from jail to appear before the special task force investigating the multi-billion ringgit losses incurred by Bank Negara Malaysia’s dabbling in foreign exchange trading in the 1990s. His daughter, Nurul Izzah Anwar, told Malaysiakini prison officials informed the family that Anwar had been taken to the finance ministry for a hearing, following which the family also went to the ministry in Putrajaya in an attempt to get more information. Effective July 2018, access to full reports will only be available with a subscription. Sign-up now and enjoy one (1) week free access! Your Opinion Does Not Matter. BNM Forex Scandal: A Crime Against Malaysians Exposed By Lim Kit Siang. I simply do not comprehend the fuss that is being kicked up by Mahathir’s fanatics. On one hand they want the transparency that none of us got when Mahathir was the Prime Minister; on the other they are fuming because Mahathir, Nor Mohamed Yackop and Anwar have been implicated in the findings of the Royal Commission of Inquiry (RCI) for the Bank Negara Malaysia (BNM) foreign exchange scandal of the 1990s. Mahathir’s long-time crony Daim Zainuddin, who served as finance minister from 14 July 1984 to 15 March 1991, for having aided and abetted Nor Mohamed by leaving BNM “ to its own devices ”.

Let us ask the very man whose perseverance has finally paid off: This ought to be the reaction to the RCI findings if we are to ask Lim Kit Siang. Yes. The loss of RM31.5 billion through forex gambling was and still is a crime against the Malaysian people. And if it weren’t for Lim Kit Siang’s persistence and perseverance, we would not have gotten where we are now. Three people have been found principally liable for the criminal breach of trust and should be probed further over their involvement and liability. They are the former Prime Minister Mahathir Mohamad, his then-Finance Minister Anwar Ibrahim, and ex-BNM advisor Nor Mohamed Yackop. The commission found in its 524-paged report that the Cabinet in the 1990s was not given the full picture by Anwar on the forex losses, adding that he had “ deliberately concealed facts and information and made misleading statements “. It is also of the opinion that the then Prime Minister (Mahathir) had condoned the actions of the Finance Minister. The RM31.5 billion losses, the report said, were hidden using “ unconventional accounting treatments ”, such as booking losses to reserves in the balance sheet and the absorption of the remaining losses by the transfer of shares from the Government to BNM as well as the creation of a “ Deferred Expenditure ” to be repaid in instalments over a decade. The RCI noted that Anwar Ibrahim, the then Finance Minister, had been informed about the actual forex losses suffered by BNM. It also said that Mahathir was informed by Anwar together with then Treasury deputy secretary-general Tan Sri Clifford Francis Herbert in late 1993 that BNM had suffered estimated losses of RM30 billion on the forex dealings for 1992 and 1993. However, in the extract of minutes from three Cabinet meetings on March 30, April 6 and 13 in 1994, Anwar had made “ no mention of the actual losses of RM12.3 billion for 1992 and RM15.3 billion for 1993 .” Anwar had chaired the March 30 meeting as the deputy prime minister. The losses for 1993 were reported as RM 5.7 billion. The RCI also noted that the prime minister, who chaired the meeting on April 6, did not correct or offer more information when the forex losses for 1993 were recorded as only RM5.7 billion. The RCI report said as pointed out by Herbert, he had expected Mahathir to be outraged but his reaction was quite normal with him uttering “ sometimes we make profit, sometimes we make losses ”.

“ His reaction to and acceptance of the huge forex losses suggest that he could have been aware of the forex dealings and its magnitude ,” said the report. Why Did It Take So Long? Of course supporters of Mahathir got their knickers in a knot over the RCI findings, mostly harp on the duration it took to have a RCI formed, whether it was formed to time itself with the looming general elections so that the Pakatan Harapan would be epitome of broken hopes? Lim Kit Siang may have harped on the matter, trying to get an RCI formed since 1994, if not earlier. Mahathir was the Prime Minister then until the end of 2003. No one during Pak Lah’s time took up the issue as Mahathir was then breathing down Pak Lah’s neck watching the latter’s every move. In the end, Mahathir got Pak Lah ousted for not playing his game his way. When Najib Razak took over at the beginning of the second quarter of 2009, Malaysia’s economy had shrunk even though oil price was high. The GDP growth rate for Malaysia in 2009 was -2.5 percent because of the global financial crisis then, hence Najib Razak’s priority then was to safeguard the economy and take measures to improve on the GDP growth. Malaysia’s GDP growth rate for 2009 was -2.5% And ever since then Najib had been fighting on all fronts to make sure that Malaysia goes through a sustainable growth, and that there would be enough government money to still help the people, especially those from the B40 income group.

Hence, we see various initiatives like the 1Malaysia Clinic, Kedai Rakyat 1Malaysia (which is now being revamped), BR1M, PR1MA and various other 1Malaysia initiatives. And while all that was happening, Lim Kit Siang was still going around asking for an RCI to be formed for the BNM forex scandal. In the run up to the 13th General Elections, Lim Kit Siang wrote this on the BNM forex scandal: “I had estimated in Parliament two decades ago that Bank Negara lost a colossal RM30 billion from the Bank Negara foreign exchange scandal under Mahathir’s premiership. But Bank Negara claimed RM10.1 billion loss in 1992 and RM5.7 billion in 1993 while former Bank Negara Deputy Governor Dr. Rosli Yaakop estimated last year at a public forum that Bank Negara lost between USD27 to USD33 billion, which was five times more than its foreign reserves and its entire assets of USD20.7 billion in 1992.” You can read more on what Dr Rosli Yaakop had said on the BNM forex scandal HERE. Lim Kit Siang also said that Malaysian voters should not only pass a verdict on Najib’s non-transformation in the past four years, but also pass judgment on Mahathir’s 22 years of authoritarian and corrupt policies when he was Prime Minister from 1981 – 2003. He said: “I am on public record as saying that if Pakatan Rakyat is to capture Putrajaya in the 13GE, we should re-open investigation not only on the RM30 billion Bank Negara forex scandal of 1992, there should be a Royal Commission of Inquiry into the RM100 billion losses suffered by the country in the financial scandals of the 22-year Mahathir era.” Kit Siang added that the voters should decide whether they endorse the proposal to have a wide-ranging public inquiry into Mahathir’s financial scandals in 22 years which have cost the country RM100 billion of losses and for which the present generation of Malaysians are still paying the price – although there is totally no accountability and transparency about these glaring instances of corruption, cronyism and abuses of power for more than three decades. In June 2017, Lim Kit Siang even wanted the report recommending the RCI to be made public. Finally, on 8 August 2017, the RCI commenced, and Kit Siang’s 25 years of wait ended. Kit Siang’s hard work finally paid off. And one other Pakatan leader who had been lying very low beneath the BNM forex scandal radar is Anwar Ibrahim.

If anyone was to ask why did the government not do anything between 2004 and 2017, the answer would be why hadn’t Anwar, since 2 September 1998, asked for an RCI on the matter? Was he afraid that he might get implicated? You and I know the answer to that now. And what about the 1MDB scandal? Well, unlike the BNM forex scandal, the 1MDB case was investigated by the Parliament’s Public Accounts Committee, the Royal Malaysian Police, Bank Negara Malaysia and the Malaysian Anti-Corruption Commission. Police reports were also made against 1MDB. But not a single sen had gone missing! For the BNM forex scandal, this is the first time that it has been investigated – by the RCI, and soon by the Royal Malaysian Police. And the first police report was made by a member of the RCI itself after the RCI findings report was published – 25 years after the whole thing happened. So, we should all say our thank you to Lim Kit Siang for exposing this crime against ALL Malaysians. Thank you, Lim Kit Siang – for persistently asking for your good friends to be investigated.

Ex-BNM man: We probably ‘lost’ RM100 billion in forex scandal. Former Bank Negara assistant governor says Malaysia lost out in opportunity costs, following the US$10 billion forex losses in the 1990s. KUALA LUMPUR: Malaysia could now have RM100 billion more in foreign reserves had Bank Negara Malaysia (BNM) not lost heavily in the currency market over two decades ago. This is the view of former BNM assistant governor Abdul Murad Khalid, who based the figure on the opportunity cost of BNM losing US$10 billion (RM42.8 billion) in the 1990s. The New Straits Times quoted him as saying: “We are losing RM4 billion in income annually because of the scandal. The total losses then were US$10 billion which is equivalent to about RM40 billion today. “The money would have increased to US$26.6 billion or more than RM100 billion, if it had been kept in government savings, at a compound interest of 4% annually.” Murad said the Royal Commission of Inquiry (RCI) must proceed despite allegations of political motivation, alluding to questions raised as to why the government wanted to hold an RCI only now – when former prime minister Dr Mahathir Mohamad, under whose watch the alleged scandal occurred, is fighting to replace Najib Razak as prime minister. It was Murad who, on Jan 26, revived the forex issue by revealing that BNM had suffered US$10 billion in foreign exchange market losses in the early 1990s, much higher than the figure of RM9 billion disclosed by BNM. The Prime Minister’s Office announced the RCI on June 21, on the recommendation by a special task force established after Murad’s revelation to look into BNM’s forex losses in the 1980s and 1990s. The chairman of that task force, Mohd Sidek Hassan, had earlier said its investigation learned that “the figure is greater than what was disclosed” and that an RCI would be able to uncover more. Bank negara forex scandal wiki. Updated 1 year ago · Published on 20 Apr 2017 8:20PM · 0 Comments.

DE facto opposition leader Anwar Ibrahim was today escorted from jail to appear before the special task force investigating the multi-billion ringgit losses incurred by Bank Negara Malaysia’s dabbling in foreign exchange trading in the 1990s. His daughter, Nurul Izzah Anwar, told Malaysiakini prison officials informed the family that Anwar had been taken to the finance ministry for a hearing, following which the family also went to the ministry in Putrajaya in an attempt to get more information. Effective July 2018, access to full reports will only be available with a subscription. Sign-up now and enjoy one (1) week free access! The Bank Negara scandal, yet again. There is no confirmation yet how the police are going to proceed with this case but indications are they are already quite fed up with the whole matter and this time may throw the book at Datuk Nurshamsiah Mohd Yunus, Shamsuddin Mahayidin and Abdul Rahman Abu Bakar. THE CORRIDORS OF POWER. Raja Petra Kamarudin. Resignation of Assistant Governor Datuk Abdul Murad Khalid. The Bank wishes to announce the resignation of Datuk Abdul Murad Khalid, Assistant Governor, from the Bank effective 1 February 1999. As Assistant Governor, Datuk Abdul Murad was responsible for banking regulation and banking supervision.

That was the Bank Negara announcement of Wednesday, 3rd February 1999. The Murad story is a long story and if you want to know what that story is you can read about it HERE . The long and short of it is: a very senior man in Bank Negara was forced to resign (as were some others as well around that same time) because he was involved in laundering RM3 billion of Anwar Ibrahim’s money. Murad was eventually arrested and in his statement he revealed how the RM3 billion was distributed all over the world and placed in various bank accounts. Just six years before that it was revealed that Bank Negara lost RM30 billion in a Forex scandal that implicated both Tun Dr Mahathir Mohamad and Anwar. Lim Kit Siang, the opposition leader at that time, was so outraged, especially about Anwar lying to Parliament, that he demanded his resignation. So Bank Negara has been in the spotlight more than once in the 1990s during the time when Dr Mahathir and Anwar were in power. And both times it was for criminal acts. And now it looks like the bank is going to be in the centre of a scandal cum criminal act yet again. Datuk Nurshamsiah Mohd Yunus, Bank Negara’s Deputy Governor, plus Shamsuddin Mahayidin and Abdul Rahman Abu Bakar, have been identified as the three culprits from the bank who leaked confidential information to the Wall Street Journal. A report has already been made against them and there is a strong possibility they are going to suffer the same fate that Murad did back in 1999. In the first Bank Negara scandal in 1993 it involved the crime of trying to cover up the RM30 billion Forex losses and the crime of lying to Parliament. In 1999 it was the crime of money laundering and the crime of siphoning out RM3 billion. This time it is more serious.

The authorities are working on the angle that these three Bank Negara officers are trying to subvert the government and subversion can be interpreted as an act of treason. This can have very serious repercussions on the country and any act of sabotage to bring down the country is punishable under the charge of waging war against the Agong and can attract the death sentence. Maybe they thought they were just sabotaging the Prime Minister but when the act of sabotaging the Prime Minister involves sabotaging the country then it would tantamount to treason. And treason means death. There is no confirmation yet how the police are going to proceed with this case but indications are they are already quite fed up with the whole matter and this time may throw the book at Datuk Nurshamsiah Mohd Yunus, Shamsuddin Mahayidin and Abdul Rahman Abu Bakar. We shall wait to see what the police say over these next few days. Meanwhile, the Thai police have confirmed that Xavier Andre Justo is under maximum security. Though the Thai police deny that there was an attempt to poison Justo, they do confirm that he is under maximum security to prevent anyone from reaching him and persuading him to change his testimony. How this ‘persuasion’ will be done was not mentioned but probably, as Don Vito said in ‘The Godfather’, they can “make him an offer he can’t refuse.” I just love that movie, don’t you? I have probably seen it more than six times, the most recent being last month. The Wastage of Taxpayer Funds Report. The forex scandal in early 90s. Estimated losss: As high as RM30 billion! Some of you may have heard of the case of Nick Leeson whose exploits as a financial trader caused the spectacular collapse of the British bank Barings in 1995. He was based in Singapore and was making unauthorized speculative trades on the Japanese stock prices and interest rates.

Unfortunately for him, the Kobe earthquake struck and caused the Asian markets to plunge resulting in Leeson and the bank losing more than US$1 billion. Barings could not sustain such a hugh loss and was declared insolvent. Leeson was eventually jailed 4 years for fraud and forgery in Singapore. The case above illustrates the high risks involved in trading in financial instruments. Large profits can be made but monumental losses can result if the trades go sour. A few years earlier in 1992-1993, Malaysia’s very own Bank Negara was also involved in risky forex trading which landed it in serious trouble and resulted in a loss estimated to be as high as RM30 billion. It is not clear exactly when such activities started but bank was supposed to have the most sophisticated trading rooms in the world which impressed Mahathir who was the PM then when he toured the trading rooms. He had given approval for Bank Negara to continue its speculative currency trading after he was informed about it. Bank Negara’s forex trading activities were well-known at that time and a source of concern to banks across Asia. “It became the most awesome currency trader in the world” said the author of the book “Vandals’ Crown: How Rebel Currency Traders Overthrew the World’s Central Banks.

” On some days, it traded US$1 billion to US$5 billion which is very unusual. Even the Bank of Japan rarely traded more than US$1 billion and only when it had wanted to intervene in the foreign exchange market to protect its currency. Central banks normally enter the forex market only to influence its own currency rate. However, Bank Negara was trading in other currencies and was profiting from their movements. In other words, it had become a profit centre for the government using the country’s reserves to speculate in the currency market. Surely, that is not the role of a central bank. Why is Bank Negara undertaking such profit-making activities putting the country’s reserves at great risk? Just like in the Nick Leeson’s case, it just needed an unfavorable event to cause monumental losses. Bank Negara was holding large positions betting on the pound sterling to go up. However, Britain withdrew from the European Exchange Rate Mechanism causing the sterling to collapse. This resulted in losses estimated to be between RM16 billion and RM30 billion in just 2 years in 1992-1993. Can you imagine how much is RM30 billion? If you strike the first prize in the lottery draw of RM3 million – every single draw of the year and every year for 80 years you will get near to that astronomical figure!

Up to this day, a full account and disclosure of the forex fiasco has not been forthcoming despite the persistent efforts of Lim Kit Siang in bringing up this issue in parliament on many occasions. The following is his favourite quote from the Vandal’s Crown by Gregory J. Millman: “Using all the resources a central bank commands – privileged information, unlimited credit, regulatory power, and more – Malaysia’s Bank Negara became the most feared trader in the currency markets. By trading for profit, Bank Negara committed apostasy against the creed of central banking. Instead of working to ensure global financial stability, Bank Negara repeatedly shoved huge sums of money into the most vulnerable market situations in order to destabilize exchange rates for its own profit” (p.226) “(Bank) Negara operated behind a thick veil of secrecy. The bank seldom spoke publicly about its controversial trading activities. Yet it was increasingly clear to foreign exchange traders that Bank Negara’s operations in the foreign exchange markets went far beyond simple self-defense. It became the most awesome currency trader in the world.” (p. 227) “(Bank) Negara’s market manipulation was so egregrious that one American central banker said, ‘If they tried this on any organized exchange in the world, they’d go to jail.’ However, in the unregulated international currency markets, there were neither police nor jailers. The only rule was the rough justice of the vandals, and it was this rule that eventually brought (Bank) Negara down. “In 1992, (Bank) Negara took on a large pound sterling position, apparently expecting Britain to maintain the discipline required by the European Exchange Rate Mechanism. It was a bad economic and political judgement.

(Bank) Negara lost approximately $3.6 billion when Britain withdrew from the ERM, letting sterling collapse. The next year, (Bank) Negara lost an additional $2.2 billion. By 1994, Bank Negara was technically insolvent and had to be bailed out by an infusion of fresh money from Malaysia’s finance ministry.” (p.229) When will the country get the whole story of this biggest financial scandal in its history? Specifically, when will we get answers to some of these questions: Why was Bank Negara speculating in the risky forex market to make profits? Was it a proper policy for a central bank to use country’s reserves to make profits? Who was reponsible for authorising such activities? What were the limits on how much of the bank reserves can be used for currency speculation? Were these limits adhered to? Was the cabinet aware that the country’s reserves were used for such risky speculation? Wasn’t there a mechanism to monitor the currency trading?

Why wasn’t serious actions taken against those responsible for such huge losses? Bank negara forex scandal wiki. PUTRAJAYA - A former senior official at Malaysia’s central bank yesterday made an explosive allegation against former finance minister Anwar Ibrahim, in his testimony during the first day of an inquiry into billions of dollars lost in foreign exchange trades in the 1990s. Abdul Murad Khalid, a former assistant governor at Bank Negara Malaysia (BNM), claimed that Anwar said he would have to resign as finance minister if the full extent of BNM’s forex losses were revealed to the public. Datuk Murad told the Royal Commission of Inquiry (RCI) that he was instructed by then-BNM governor Jaffar Hussein in 1994 to explain the forex losses to Anwar, who is now an opposition leader. “Anwar had asked me to join him on his flight to Hawaii to provide an explanation on the forex losses, as instructed by Jaffar. After explaining (the matter) to Anwar, he said that he understood the losses and that he would discuss it with Tan Sri Jaffar Hussein,” he told the inquiry. Mr Murad added: “. after I gave him the explanation, Anwar commented that should the true figures of the forex losses were to be revealed to the public, he would have to resign as finance minister.

” Anwar was Malaysia’s finance minister from 1991 to 1998. The RCI was formed to investigate the forex losses scandal that erupted when Tun Mahathir Mohamad was prime minister. Like Anwar, Dr Mahathir is also now an opposition leader arrayed against Prime Minister Najib Razak. Mr Murad’s allegation is explosive because he has now named Anwar’s alongside Dr Mahathir as someone who knew about the central bank’s losses. Mr Murad went on to testify yesterday that Tan Sri Jaffar was unaware of the magnitude of the forex losses, which Murad claimed to be at least US$10 billion (then RM25 billion). The RCI also concluded yesterday that BNM had lost around RM31.5 billion in forex trades over 20 years ago and that the figure had been concealed from the bank’s reports. Its chairman, Tan Sri Mohd Sidek Hassan, said: “We have made a finding today that Bank Negara lost RM31.516 billion between 1991 and 1994. The figure, however, is hidden from Bank Negara’s reports. “We will find out who was responsible in asking for it to be concealed,” he said before adjourning the proceedings. Earlier, former BNM employee Abdul Aziz Abdul Manaf told the five-man panel that the central bank suffered RM31.516 billion losses in forex trading. However, it was unclear how the losses were calculated. Panel member Datuk Tajuddin Attan asked Mr Aziz to explain why the central bank’s reserves appeared unaffected by the losses in the later years.

Mr Aziz said he was unable to provide further details on how the losses occurred as he had only provided an “accounting treatment”. Earlier, the panel had dismissed an attempt by the central bank to have the probe conducted behind closed doors on the grounds that it involved classified documents. A BNM lawyer said revealing the documents to the public may implicate the witnesses who are slated to testify in the case. “Two witnesses from BNM have no immunity for criminal action to breach OSA (Official Secrets Act). We have an alternative suggestion - exclude the investigation to the press and public,” Mr Tan Hock Chuan said in court on Monday morning. However, Mr Mohd Sidek disagreed . “This is an inquiry, nobody is on trial. “I’m told that under the Act. commissioners have powers. therefore from now I’m going to continue without delay the inquiry. If everything is under OSA, what’s the point of having an inquiry,” he said. Two witnesses - former BNM employee Datuk Ahmad Hizzad Kamaruddin and Mr Abdul Aziz - testified earlier yesterday. The inquiry stemmed from Mr Abdul Murad’s claims in January that the central bank suffered foreign exchange losses of up to US$10 billion (S$13.6 billion) in the 1990s, far more than the RM9 billion (S$2.9 billion) loss that was publicly reported at the time. The forex losses scandal was among the biggest from Dr Mahathir Mohamad’s time as prime minister. The scandal led former BNM governor Mr Jaafar to resign. The inquiry will take place over 10 days up to Sept 21, with its report to be submitted within three months from July 15, the date the RCI was established.

The RCI is chaired by Mr Mohd Sidek and its members include former Federation of Malaysian Manufacturers president Tan Sri Saw Choo Boon, High Court judge Datuk Kamaludin Md Said, Bursa Malaysia chief executive Mr Tajuddin and Malaysian Institute of Accountants member Pushpanathan Kanagarayar. Your Opinion Does Not Matter. The Bank Negara RM30 Billion Forex Losses Scandal. Kit Siang also published a book on the BNM Forex losses scandal. Yes. The year was 1994 when Lim Kit Siang found it ultra-important to publish a book on the Bank Negara Malaysia (BNM) foreign exchange scandal that caused the loss of RM30 billion (estimated to be at RM49 billion in today’s terms). The book is called, as you would have guessed, ‘ The Bank Negara RM30 Billion Forex Losses Scandal ‘. The BNM forex scandal losses in 1991 made international headlines at the time, forcing the resignation of BNM’s governor Jaffar Hussein. Again I should thank Kit Siang for writing all this, making it easier for me to see what he had written on the issues he raised in the past. In 2004, Kit Siang called upon Nor Mohamed Yackop who then was sworn in as a Senator to become Finance Minister II to issue a White Paper on the matter. “ Up to now, the government has failed to “come clean” on the colossal Bank Negara forex losses as a result of speculation in the international currency markets from 1992-1994, with the losses cited as ranging from RM10 billion to RM30 billion. In Parliament in 1994, I had given reasons as to why the Bank Negara’s forex losses as a result of its forex speculation operations could have amounted to as high as RM30 billion, which had not been seriously rebutted by any top government leader or Bank Negara official ,” he wrote on his blog limkitsiang. com. In April 1991, a Reuter news agency report from London described Bank Negara as “ a dominant force on the foreign exchange scene for some years ” and it was accused by some forex operators as “ a market bully ”. The 1991 Reuter report states: “Over the past two years it has stepped up its trading volume, and this year it has started dealing in what dealer described as ‘really massive amounts’… “Typically, Bank Negara operates in US$50 million lots, compared with the market norm of US$5 million or US$10 million and deals with maybe six major banks in Europe and six in New York, dealers said.

“One trader said the only dealers rivaling Bank Negara would be the Japanese funds. But while these funds enter the market no more than once or twice a year, Bank Negara is coming in and doing yards (billions) of dollars a day. “”Its recent technique has been to hit major banks for US50 million each, then his them 10 minutes later, dealers said. “Then it changes centre, and does it all over again.” The April 1994 issue of Malaysian Business – one of the publications in the New Straits Times stable – reported that Bank Negara’s maximum exposure in the foreign exchange markets reached as high as RM270 billion – three times the country’s GDP and more than five times the country’s foreign reserves at the time! Kit Siang added that some Government leaders were wise after the event, and one of them was none other than Daim Zainuddin, under whose first tenure as Finance Minister from 1984-1991 the Bank Negara’s unorthodox forex speculation started, who said on April 4, 1994 that while those responsible for the huge forex losses of Bank Negara had accounted for their mistakes by resigning, central banks should never “ play with fire ” with such forex speculation. It was Kit Siang who pointed out the irony. In 1995, a book on international high finance, ‘ The Vandal’s Crown ‘ by Gregory J. Millman on Page 229 had this to say about the Bank Negara forex scandal: “Using all the resources a central bank commands – privileged information, unlimited credit, regulatory power, and more – Malaysia’s Bank Negara became the most feared trader in the currency markets. By trading for profit, Bank Negara committed apostasy against the creed of central banking. Instead of working to ensure global financial stability, Bank Negara repeatedly shoved huge sums of money into the most vulnerable market situations in order to destabilize exchange rates for its own profit” (p.226) “(Bank) Negara operated behind a thick veil of secrecy. The bank seldom spoke publicly about its controversial trading activities. Yet it was increasingly clear to foreign exchange traders that Bank Negara’s operations in the foreign exchange markets went far beyond simple self-defense.

It became the most awesome currency trader in the world.” (p. 227) “(Bank) Negara’s market manipulation was so egregrious that one American central banker said, ‘If they tried this on any organized exchange in the world, they’d go to jail.’ However, in the unregulated international currency markets, there were neither police nor jailers. The only rule was the rough justice of the vandals, and it was this rule that eventually brought (Bank) Negara down. “In 1992, (Bank) Negara took on a large pound sterling position, apparently expecting Britain to maintain the discipline required by the European Exchange Rate Mechanism. It was a bad economic and political judgement. (Bank) Negara lost approximately $3.6 billion when Britain withdrew from the ERM, letting sterling collapse. The next year, (Bank) Negara lost an additional $2.2 billion. By 1994, Bank Negara was technically insolvent and had to be bailed out by an infusion of fresh money from Malaysia’s finance ministry.

” Recently, Abdul Murad Khalid who was the Assistant Governor of BNM who resigned in 1999 revealed that the forex losses were in actual US Dollars and not in Malaysian Ringgit. “ There was no control… The most important thing is that there was no investigation at all ,” Murad was quoted as saying by NST. Asked if the then Prime Minister knew about the losses, he replied: “ I’m sure the governor briefed them .” Kit Siang’s silence on this issue is indeed deafening. The so-called champion of the rakyat now has his balls as wrinkled as his face is. And all to achieve his personal political ambition. In 1993, Anwar Ibrahim who was then the Finance Minister responded on behalf of his then-master, U-Turn Mahathir, to Kit Siang’s query on some “ rumours about BNM losing money gambling forex “. Anwar said that the rumour was not true at all. When confronted, again by Kit Siang, a year later, Anwar said “ the amount is not huge .” The above engagements can be found in the Parliament Hansard. After Murad’s revelation we know now that the amount is actually colossal. We also know that U-Turn Mahathir as well as Daim Zainuddin were very much in the know of the losses. And we know that Lim Kit Siang is just another opportunist snake manipulating the issue to gain support from the rakyat but now bats no eyelid to work hand-in-hand with his sworn enemy so he could come into power. I am pretty sure he feels pleased looking at himself in the mirror every morning knowing he had blatantly lied to the people.



Articles:

  • Bank negara forex scandal wiki