Auditor told not to mess with Bank Negara’s forex trades

Kanason, who was former principal auditor and also a director responsible for planning and audit reporting said BNM was into forex trading from 1985 onwards.

“As to why Bank Negara made a decision to go into large-scale forex trading from 1985 was enquired into by reference to statements, speeches of the governor and of other senior officers of BNM, but no information was available in the bank’s library”, Kanason added.

Accounts Department Saleha Lajim told the Royal Commission of Inquiry (RCI) to investigate the central bank’s foreign exchange (forex) losses in the 1990s that she received oral instructions from then Deputy Governor Tan Sri Dr Lin See-Yan to make changes to the bank’s annual financial statement.

“But auditors do not decide on matters of law or its interpretation”.

“There were big losses suffered by BNM from forex transactions”.

Kanason said from the audit point of view, buying and selling foreign currencies daily in millions of ringgit, was trading and BNM was very heavily engaged in the trading of currencies. “It was chose to seek assistance from the AGC”, said Kanason, who is the seventh witness called by the RCI on the losses suffered by BNM due to forex trading in the 1990s.

Kanason consulted AGC head of advisory services Tan Sri Ainum Mohd Saaid.

Auditor-general “blew his top” after being told by Attorney-General’s Chambers that “orders came from above not to interfere” in BNM’s involvement in forex trading, according to witness.

After several days without the written response, Kanason said he contacted Ainum to inquire on the matter.

Kanason said he rang up Ainum and she simply replied: “Orang atasan cakap jangan campor tangan”.

He said he did not ask Tan Sri Ainum who was the “orang atasan” she was referring to and neither did she mention.

“This development was reported to the then auditor-general”.

He said an auditor in charge of the audit section of BNM had brought a printout of one day’s forex transactions amounting to RM50 million, to a meeting held over the matter.

Saleha, who joined BNM in 1986 as a senior accounts officer, said if the draft board paper was approved, it would be verified by the governor and submitted to the Accounts Department to make the changes.

“I can’t recall what year but (BNM governor) Tan Sri Jaafar Hussein told me to look into the account of BNM”.

The RCI hearing on the first day, Aug 21, concluded that the central bank lost RM31.5 billion in forex trades between 1991 and 1994 and that the figure was concealed from the bank’s financial reports.

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