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End the "Close-One-Eye" or "Blame Mahathir" Syndromes accept full responsibility for the worsening corruption in the country as well as have public inquiries into scandals of the past, including the RM30 billion Bank Negara foreign exchange speculation scandal

by Lim Kit Siang  


(Parliament, Wednesday) :  It is sad and shocking that the adverse Transparency International (TI) Corruption Perception Index (CPI), with Malaysia dropping another five places from last year or seven places since the takeover of the premiership by Abdullah in 2003, being placed in the unprecedented low position of 44th ranking, has not created sufficient alarm whether from the Ministers or MPs (over 91 per cent of whom come from the Barisan Nasional).

Apart from lip-service concern, the Barisan Nasional instinct is still basically one of denial syndrome, except there is a variation into the "Close-One-Eye" syndrome or "Blame Mahathir" syndrome.

Malaysia can never be an example to other countries in transparency, integrity and good governance unless there is the political will to end such variations of denial syndrome, whether ¡°close-one-eye¡± syndrome or ¡°blame Mahathir¡± syndrome.  The present administration must be man enough to accept full responsibility for the worsening corruption in the country as well as having the political will to rectify past injustices and exorcise the ghosts of past scandals.

This is why the Abdullah premiership must seriously consider the re-opening and review of the 1997 judicial crisis which damaged Malaysia¡¯s judicial independence from which we have not yet recovered.

It is also for this reason why past scandals must be revisited with open public inquries.

During the debate on the Central Bank of Malaysia (Amendment) Bill in July this year, I had called for a full and total disclosure of the RM30 billion Bank Negara foreign exchange (forex) speculation  losses as to how these ¡°paper losses¡± had triggered off other mega-financial scandals like the RM1.8 billion MAS-Tajudin privatization scam.


The Parliamentary Secretary to the Finance Ministry, Datuk Seri Dr. Hilmi Yahya in his reply said that the losses from the Bank Negara foreign exchange losses were only RM5.7 billion.


This explanation from Hilmi was most irresponsible and untrue.


This was because a Bank Negara audit into the 1992 Bank Negara accounts alone had found the following:


  • On the 1992 Bank Negara report of a revaluation loss of RM12.35 billion for the financial year ended December 31, 1992, about RM8.5 billion was attributed to loss occurred in foreign exchange transactions.  This loss has been embedded in the revaluation loss of RM8.58 billion for the Bank¡¯s nostro account balances.


  • The Bank had understated its total net contingent liabilities in the Annual Report for the financial year ended December 1992.  The actual net contingent liabilities of the Bank were RM14.7 billion instead of RM2.7 billion as stated in the notes of the Bank¡¯s accounts. 


  • The Bank was involved in voluminous forward foreign exchange transactions. The average buy and sell transactions maturing per month was RM149.7 billion and RM153.4 billion respectively in 1992.  As a substantial portion of these foreign exchange transactions was speculative in nature and not related to the management of the country¡¯s reserves as stated under Section 4 of the Central Bank of Malaysia Ordiannce, the Bank could have deemed to have breached Section 31(a) of the Ordinance which stipulates that ¡°the Bank may not engage in trade or otherwise have a direct interest in any commercial, agricultural, industrial or any other undertaking except with the approval of the Minister¡­¡±


The Bank Negara forex scandal is one of the biggest scandals in the history of the country and the glare of public scrutiny  must be brought to bear to bring out the truth to all Malaysians by way of a full open inquiry.


*  Lim Kit Siang, Parliamentary Opposition Leader, MP for Ipoh Timur & DAP Central Policy and Strategic Planning Commission Chairman

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