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Forex inquiry recommends Mahathir and Anwar be investigated

Commission of inquiry finds former Malaysian leaders were involved in forex trading losses

An inquiry into foreign exchange losses at Malaysia's central bank in the 1990s has recommended that former prime minister Mahathir Mohamad and jailed opposition leader Anwar Ibrahim be investigated for criminal breach of trust.

The findings of the Royal Commission of Inquiry were tabled in Parliament yesterday, but were not debated.

The commission found that Dr Mahathir, Malaysia's prime minister from 1981 to 2003, and Anwar, who was finance minister from 1991 to 1998, were involved in Bank Negara Malaysia (BNM)'s foreign exchange trading losses of RM31.5 billion.

Both Dr Mahathir and Anwar are leaders of political parties within the opposition Pakatan Harapan coalition.

"The commission is of the view that from the facts and circumstances presented to the enquiry, there is a basis to recommend that the Polis Diraja Malaysia (Royal Malaysian Police) carry out a formal investigation into possible offences of criminal breach of trust and/or cheating that may have been committed by officers of BNM, BNM's Board, the MoF (Finance Ministry), Auditor General's Department, the Minister of Finance and the Prime Minister in carrying out speculative forex dealings and concealing the forex losses from the Cabinet and Parliament," the report said.

The commission also suggested that Dr Mahathir may possess more information than he previously claimed to know, despite having testified as a witness at the inquiry.

"The conclusion that he could have been aware of the actual losses is not without merit... Despite his denials, the commission is of the opinion that a thorough investigation should be carried out to determine the extent of (Dr Mahathir's) involvement and liability on the matter," it said.

Dr Mahathir had told the inquiry that he did not have direct knowledge of the central bank's trading activities or the losses incurred thereafter.

The commission stated that it could not avoid "the glaring fact that (Anwar) as the finance minister was responsible for misleading (deceiving) the Cabinet and Parliament on the actual forex losses faced by the BNM".

Meanwhile, the commission also named former BNM adviser Nor Mohamed Yackop as the person who may be chiefly liable for the criminal breach of trust probe, basing it on the evidence it received during the inquiry.

Tan Sri Nor Mohamed resigned from his post at the bank in 1994.

The forex losses scandal was among the biggest from Dr Mahathir's time as prime minister, and it led to the resignation of then BNM governor Tan Sri Jaffar Hussein.

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