Malaysian Panel Advises Probe of Mahathir, Anwar Over Forex Losses in 90s

Ray Sherman
Kuala Lumpur
171130-MY-mahathir-anwar-1000 Malaysian Prime Minister Mahathir Mohamad (right) and his deputy, Anwar Ibrahim, pray during celebrations marking the 50th anniversary of the United Malays National Organization party, in Kuala Lumpur, May 10, 1996.
AFP file photo

With a general election looming, a Malaysian government-commissioned inquiry is recommending that authorities investigate two opposition leaders – ex-Prime Minister Mahathir Mohamad and his former deputy, Anwar Ibrahim – in connection with billions of dollars in central bank losses during the 1990s.

The recommendation is in a report by the Royal Commission of Inquiry (RCI) that was made public on Thursday, days after the deputy prime minister said that the next general election would likely occur in the second half of February 2018, according to local media.

“The commission is of the opinion that the then-Minister of Finance had deliberately concealed facts and information and made misleading statements to the Cabinet,” the report said, referring to Anwar, who was also finance minister when the central bank absorbed 31.5 billion ringgit (U.S. $7.7 billion) in foreign exchange losses between 1992 and 1994.

“The commission is also of the opinion that the then-Prime Minister had condoned the actions of the Minister of Finance,” according to the commission’s 524-page report, which did not identify Mahathir and Anwar, who is now serving a prison sentence on a sodomy conviction, by name.

The report marks the first time that Mahathir, 92, and Anwar, 70, have been formally accused of potential criminal wrongdoing in connection with those losses by the central bank, formally known as Bank Negara Malaysia (BNM), more than 20 years ago.

It said that various government officials, including the prime minister and finance minister, may have committed criminal breach of trust or cheated, by carrying out speculative forex dealings and then concealing the losses.

Once bitter foes, Mahathir and Anwar recently joined forces to lead a new opposition coalition, Pakatan Harapan (Alliance of Hope), pitting itself against Prime Minister Najib Razak and his ruling United National Malays Organization (UMNO) party, which has controlled Malaysian politics throughout the country’s 60-year history.

Mahathir has been among Najib’s fiercest critics, leading calls for the current PM to resign over allegations implicating him in a corruption scandal tied to the sovereign state fund 1MDB. Najib has denied any wrongdoing in the 1MDB affair.

‘A political move’

The commission, a five-member panel appointed by Malaysia’s king, began its inquiry four months ago into allegations of massive foreign exchange (forex) trading losses incurred by the central bank in the 1990s. Twenty-five witnesses were summoned to testify before the panel, which also gathered and examined 42 related documents.

On Oct. 13, the royal commission handed its report to the king.

Although it was not listed on parliament’s agenda Thursday, the report, printed in Bahasa Malaysia and English, was placed on tables of parliamentarians.

Malaysian opposition members reacted by crying foul on the timing of the release – the last day of parliamentary deliberations this year.

“The report was ready and was sent to the Yang di-Pertuan Agong [Malaysian king] six weeks ago, it should have been given to us much earlier,” Wan Azizah Wan Ismail, Anwar’s wife and the current leader of his People’s Justice Party (PKR), told journalists at parliament.

“Today, when we asked to debate the findings, it was rejected. This shows that whatever we have assumed before has now become true, that it is a political move over an issue that was resurrected after so many years to implicate their political opponents,” Wan Azizah said.

Lim Guan Eng, the chief minister of Penang and secretary general of the opposition Democratic Action Party, said the report should be debated because it was significant.

“When I got up to ask that MPs be allowed to debate on the report, the minister said the decision would be made later,” he said.

‘Completely astounded’

Azalina Othman, the law minister who is in charge of parliamentarian affairs, asked the opposition to request in writing that the report be debated in the legislature.

“He has not written us a letter, so please give me time for this. I will inform the government and reply in writing,” she said, referring to Lim.

On Thursday, a lawyer for Mahathir accused the government of an “ambush” against his client by releasing the report to parliament without adequate public notice or providing him with a copy.

Attorney Haniff Khatri said he would comment on the report after having an opportunity to read it in full.

“[I] am completely astounded that there are references made in the Report to purported breaches of criminal law such as criminal breach of trust, when in fact the nature of the materials referred to by the RCI fell ridiculously short and [were] insufficient to reach such conclusions,” the lawyer said, citing media accounts of the contents of the report.


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