PUTRAJAYA, Aug 29 — Bank Negara Malaysia's (BNM) currency trading in the 1990s was not compliant with legal provisions imposed on the central bank then, a former auditor said today.
Testifying at the Royal Commission of Inquiry (RCI) on BNM's forex losses, Kanason Pothinker said it had been determined that the trading activities by BNM at the time failed to meet provisions under the Central Bank of Malaysia Act.
Kanason, who is now retired, was a director for audit at the Auditor-General's Office (AGO) at the time and the audit on BNM came under his purview.
However, despite his own concerns regarding the matter, Kanason quoted Tan Sri Ainum Mohamed Saaid, at the time an officer from the Attorney-General's Chambers, as saying that “higher ups” had asked for non-interference in the forex controversy.
Kanason said that Ainum made it clear that BNM’s forex activities were not provided for under Section 31 of the Central Bank of Malaysia Act 1958.
However, the AGC did not provide a written letter to BNM outlining the problem.
“Days passed without the expected written advice, and I thought I should inquire. I rang up Ainum and I was told by her, and to my best memory she said ‘the higher-ups said do not interfere’,” Kanason said in his witness statement.
Kanason is the seventh witness called to testify before the RCI, which was sitting for the third day today.
