Dr M tells why forex losses different from 1MDB scandal

Dr Mahathir Mohamad today said the foreign exchange losses by Bank Negara Malaysia during his first term as prime minister and the 1MDB scandal under Najib Razak were handled differently, as a public spat over who had mismanaged the country’s finances continues between the two former leaders.

Mahathir’s latest response follows Najib’s recent reference to the forex losses in the 1990s, estimated at about RM30 billion, hours after he lost his appeal to overturn his conviction for charges related to RM42 million in funds linked to 1MDB found in his private bank accounts.

Mahathir said the difference between the 1MDB scandal and the forex losses was that the latter was “purely verbal”.

“A bank officer stated that Bank Negara lost RM30 billion through currency trading. The bank hid the loss and allegedly I also hid the loss.

“I was not involved in the actual operation of the bank. If indeed the money was lost, the investigation should be with regard to the operation of the bank,” he wrote on his blog, adding that he had allowed the matter to be debated in Parliament unlike the revelations surrounding the 1MDB scandal.

On Dec 8, the Court of Appeal maintained Najib’s conviction and 12-year prison sentence, saying the RM42 million found in his private bank accounts was a “national embarrassment”.

In his response, Najib had referred to the foreign exchange losses.

“Isn’t that a much more colossal national embarrassment?” he asked.

During his rule, Najib established a royal commission of inquiry (RCI) on the forex losses which took place between 1987 and 1992, with Mahathir summoned as one of the witnesses.

The move in 2017 was seen as Najib’s response to Mahathir’s attacks on him at the height of the 1MDB saga.

The RCI was however abandoned following Najib’s fall from power.

Mahathir today said he was not responsible for the forex losses, adding that this was confirmed by top central bank officials at the time.

He further said that unlike the 1MDB scandal, no money had ended up in his private bank accounts.

“However, in the 1MDB and SRC International cases, millions ended up into Najib’s accounts and he happily spent the money for his personal benefit.”