Thursday, February 15, 2018

Forex investigation: Police should probe BNM sales of MAS

Upon reading the news report below, we double checked with a high level police officer on the seriousness of police to investigate the BNM forex loss:
BNM forex scandal: 27 people summoned so far
The answer was an affirmative: Yes, bro.

As a former currency dealer and in another career in financial market, suffered from BNM forex loss from massive and reckless position-taking, which led to the 1997 financial crisis, we were elated to hear police is getting down to the bottom of it.

It was obvious from the the RCI proceedings that all those called in collaborated to not speak up and intentionally pretend to #taktau. Also, it proves government is serious and not merely pursuing the RCI for political mileage.

From the report, police is also investigating the sales of TNB, Telekom, MISC and MAS shares done discreetly in 1993 and 1994 to absorb the loss and revive the financial status of BNM.

Of all these, MAS is of special interest.

Salvaging sovereignty

The BNM forex loss affected our foreign reserve and sources claimed it was completely wiped out. It would have made the central bank insolvent and as good as compromising our sovereignty.

Countries that do not operate central banks lose control over their monetary policies and in countries like Indonesia (before) and African countries, their development inhibited.

For the likes of Tan Sri Tajuddin Ramli and KWAP to come forward and salvaged the situation, they  should have been appreciated and recognised by both the public and government, but Tajuddin ended up being vilified for his national service.

It does no matter that Tajuddin is seen as a friend of Tun Daim and today, Tun Daim had to follow Tun Dr Mahathir to bat for PPBM. Truth and justice only matters.

In life and also death, politics is not a priority, but righteousness and doing good is a bigger priority.

Although it was revealed in court proceeding that Tajuddin was doing national service and instructed by Tun Daim to buy the MAS shares [read Sundaily report July 6th, 2006: Tajudin alleges secret deal with Dr M and Daim], thus government was obliged to buyback the overvalued sales of MAS to him at RM8 per shares, Mahathir did not take it kindly.

At the time Tajuddin bought the MAS shares, the market price was around RM3 per share and the price for a controlling interest in MAS should be about RM5 per share. Yet the government insist the price to be RM8 per share.

By invoking this pre-sale gentleman agreement, Tajuddin incurred the wrath of Mahathir, who subsequently had Tan Sri Nor Mohamed Yakcop to "steal" the proceeds from the sales by forcibly taking over his holding company, Naluri Berhad and also Celcom Berhad.

Without understanding the real situation and was beholden to the advice of then MOF II and the trader responsible for the collosol losses, Nor Yakcop, Tun Abdullah Badawi went along with the witch hunt.

However, all their legal efforts against Tajuddin came to naught. The arbitration in Geneva on MAS dispute of the Hahn airport acquisition did not favour them.

Ever since, Tajuddin has withdrew his counter lawsuit against government and Khazanah to seek for peaceful global resolution.

Despite that, agents of Nor Yakcop albeit Mahathir has not given up and at times, willing to ignore government directive to settle any outstanding matter.

Preposterous and unsubstantiated claim by Dato Ramli Yusof and then PAS's Salahuddin Ayub

They continued to misled the public into blaming Tajuddin as the root cause for the losses of MAS and subsequently, led to its current predicament. Other company shares sold by BNM did not suffer the same misfortune. Only MAS.

However, it is debatable to entirely blame it on Tajuddin. Though profitability then was initially erratic at the initial stage of Tajuddin management, MAS did not lose money operationally.


MAS lost money due to forex translation losses arising from the sharp fall in ringgit vis-a-vis the US dollar in 1997.

The recent RCI revealed that BNM lost RM31.5 billion and shares in GLCs held under the name of BNM had to be sold to revive BNM. As a result of wiped out reserve, BNM was under no capacity to intervene and defend the ringgit. By the third round of intervention, they put up a white flag.

After Tajuddin sold back MAS, Khazanah led by Bina Fikir's Tan Sri Azman Mokhtar, Dato Danny Yusof and the Bumiputera Merchant Bankers "mafia"screwed up the turnaround strategy. They were entertaining the scrupulous "mamak" Nor Yakcop's continuous effort to cover-up and pin the blame on others.

Intrigues behind the sales of MAS

For police to look into, there are many intrigues in the sales of MAS shares to Tajuddin.

The decision to sell MAS shares to Tajuddin came out of no where. There was no rumour heard then prior to the sales. When it was announced, the approximately RM1.8 billion deal was consummated within weeks.

A "very big" deal of such size then would have taken at least six months to put together, finalise and complete the documentation. However, it was done in a matter of 3 months.

When asked by the reporters then of the collateral for the loan, Tajuddin told the press that he was the collateral.

On top of that, court documents revealed that Tajuddin was given waiver by government from the single customer limit usually imposed by BNM on borrowers. The loan for RM1.792 billion was the biggest single loan given by Malaysian Bank at the time, let alone loan given to individual.

In addition, there was waiver on the stamp duties for loan agreement and transfer of shares. And, to add to the intrigue, the court documents said Tajuddin had not requested for the waivers.

The special facilitation only leads to the need for police to investigate and called in the various people linked to the sales of MAS.

It was not a viable deal and the likelihood is Tajuddin could be forced upon by the Mahathir via Daim to take up the financial burden to bailout BNM and clean the financial faeces left behind by himself and Nor Yakcop.

Tajuddin may be driven out of patriotic duty to help the government. It was his gratitude for the opportunities he was given, though most of his business ventures came from his own foresight and desire to be part of nation building.

Sadly, MAS could have been transformed and taken to new height with such ventures like the takeover of the Hahn airport near Frankfurt and various synergies with other ventures initiated by Tajuddin. However, it was sabotaged within MAS.

There were insecure and vengeful politicians that feared his the success and glory would overshadow them.

The police investigation should set the record straight once and for all as to who was the guilty party in causing the near demise of MAS. The names are many, including senior executives, politicians, senior government officers, and even royalties, whose been ripping off MAS through kickback and self award of contracts.

However, one has to pursue it one at a time and focus on the root cause first.

It was a case of economic devastation as a result of gambling with public money and subsequently, the true story hidden from the public and the innocent blamed.

1MDB pales in comparison to the amount loss from BNM forex trading loss and its long term negative impact on the economy.

There are perpetually sceptics but it is an undeniable fact that 1MDB has not lost money and  allegations against it and those linked to 1MDB remains speculative, still not substantiated, and not supported by any legal evidence and court proceeding.

In the case of BNM forex, money is already lost and unrecoverable. It can be seen from the proceedings of the Special Taskforce and RCI that there is still a concerted effort to cover-up by the perpetrators.


BNM forex scandal: 27 people summoned so far

February 14, 2018 @ 8:38pm, NSTP Online

KUALA LUMPUR: A total of 27 individuals have been summoned to provide their statements on the RM31.5 billion losses incurred by Bank Negara Malaysia (BNM) in its foreign exchange (forex) losses between 1992 and 1994.

Federal Commercial Crime department director Datuk Seri Amar Singh said police will call up more individuals to have their statements recorded to assist the investigation into the case.

“Out of the 27 people, 19 are BNM staff, five are from the Finance Ministry while three are civilians, including a former minister.

“At the same time, we will summon even more witnesses to provide their statements to assist the probe,” he told a press conference at Bukit Aman today.

Amar said trhe police are focusing their investigation on four main thrusts, including the possibility that several elements were used to ‘hide’ the actual losses suffered by BNM during the period.

“We are also investigating the possibility of misleading statements presented to the cabinet, parliament as well as the public over the actual scale of the losses, done with the aim of exerting influence to compel the financial institution’s annual account to be gazetted by parliament.

“At the same time, we are also probing as to whether those with interests in the matter are purposely masking the scale of the losses.

“We are also investigating whether the transfer of ownership and sale of Tenaga Nasional Berhad (TNB), Telekom Malaysia Berhad (TM), Malaysian Airlines System Bhd (MAS) and Malaysian International Shipping Corporation (MISC) shares, were done discreetly to BNM in 1993 to absorb some of the losses incurred over the forex losses, with the aim of hiding the losses and balancing the numbers,” he said.

He said the investigation is still ongoing, with relevant parties expected to be summoned to complete the probe soon.

“We will ensure that the investigation is conducted professionally and fairly, in accordance with the law,” he said.

On July 15, the Yang di-Pertuan Agong had consented to the establishment of a Royal Commission of Inquiry (RCI) to probe the losses incurred by BNN in the forex market in the 1990s.

The RCI convened for 10 days from August 21.

Following the RCI, the commission’s secretary, Datuk Dr Yusof Ismail lodged a police report after finding elements of breach of trust, fraud and other offences possibly committed by those involved in the trading.

Police then launched an investigation by setting up a special team to probe the case in accordance with Section 409, 417 and 418 of the Penal Code.

* Edited 16/2/17 9:30 AM


Anonymous said...

Looking forward to your list of names Sir. Let current generation knows who were the perpetrator for all of MAS problems.
Let justice be served to those royalty, politican, MAS employee or any government staff.


Asaif Barkiya said...

Malaysian Forexgate is indeed a scandal of unprecedented magnitude beyond imagination.Country reserve became tools and gadget to participate in a financial casino duped forex investment despite bank negara clear direction not to involve in currency investment,manipulation or predictions except to stabilise local currency when necessary.When billions involve in spot market,only selected few would have the upperhand to decide and entry and exit at points determine and contract size involved.Non other than BN top forex person/s that took order from somebody in BN to was mandated by then normally the FM at the cue and blessing then by the premier of the day.When damage has been done,such catastrophic situation warrant the same group with its call shot leader use another country assets to replenish sort of with market syndication made thru share swaps and price manipulation.
The RCI has gone so far and in very details in its finding and now the police is weathering all possible scenario to come up with its investigation to a very certain point that the culprit and his cohorts must face the music.The public is eagerly waiting for justice to prevail and those white collar criminal must be punished.

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