No Royal Commission for mega-financial scandals – why Najib so quick "on-the-draw" without giving Prime Minister, Cabinet and Parliament time to deliberate?

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Media Statement
by Lim Kit Siang  
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(Parliament, Saturday) Deputy Prime Minister, Datuk Seri Najib Razak yesterday dismissed my proposal for a  Royal Commission of Inquiry  into mega-financial scandals of the past two decades, including the RM1.8 billion Tajudin-MAS bailout and the RM30 billion Bank Negara forex losses, saying that that it was up to the court to make a decision on  Tajudin Ramli’s allegations on his 1994  acquisition of a controlling stake in MAS  and the  2000 sell-back at RM8 per share when the market price was only RM3.68 and the issues raised.

Najib cannot be more wrong as the Cabinet and Parliament cannot abdicate from their responsibility to address the grave national integrity,  good governance and public interest issues which had come into the public domain, inter alia:

• Whether principles of accountability, integrity and good governance had been scrupulously observed and complied  with in various mega-financial bail-outs and scandals in the past two decades, including the RM1.8 billion Tajudin-MAS sell-back in 2000 and  the RM30 billion Bank Negara forex losses 1992-1994;

• As Najib has confirmed that the RM1.8 billion  Tajudin-MAS sell-back to the government had been discussed in Cabinet in 2000, Parliament and the nation are entitled to know whether Ministers at the time (and about half of the present Ministers were  in the 2000 Cabinet including Najib) had queried or raised objections to the government buy-back of Tajudin’s MAS shares at RM8 per share when the market price was only RM3.68 or a premium of RM4.32 or 117 per cent.

• Putting aside the Tajudin-MAS case, as it is the subject of current litigation, had there been cases of “overriding agreement” in mega-financial bailouts and scandals where the government had divested public properties and interests to  individual UMNOputras as nominee/agent of the government under the guise of privatization, whether such “overriding agreements” had been reported to the Cabinet and the outcome of these extraordinary arrangements .

It is most surprising that Najib had dismissed the proposal for a Royal Commission of Inquiry into the mega-financial scandals in the past two decades, raising the question why he has been so quick “on-the-draw”  without giving the Prime Minister, Cabinet and Parliament time to deliberate?

Is Najib convinced that there is no useful lesson  to be learnt  in terms of national integrity and  good governance in making such a pre-emptive strike to rule out any possibility of a Royal Commission of Inquiry, or  are there a lot of “skeletons” in the mega-financial bailouts and scandals of the past two decades which must not be disturbed and must  remain hidden from public knowledge, scrutiny and accountability?

Najib knew that I had given notice to the Speaker of Parliament, Tan Sri Ramli Ngah on Thursday to move a motion of urgent definite public importance on Monday asking the Cabinet to set up a Royal Commission of Inquiry to conduct public investigations into mega-financial scandals of the past two decades, including the RM1.8 billion Tajudin-MAS bailout and the RM30 billion Bank Negara forex losses, to establish the transparency, accountability, integrity and good governance of the present administration.

Is Najib’s “double-quick” dismissal of the idea of a Royal Commission of Inquiry meant as a pre-emptive move to send a clear message to the Speaker to reject my urgent motion on Monday and a “directive” to Barisan Nasional MPs not to give any support to the proposal of a Royal Commission of Inquiry into the mega-financial scandals of the past two decades?

Are MPs and Ministers, and even the Prime Minister Datuk Seri Abdullah Ahmad Badawi who is currently on leave in Australia, not to be allowed time to have their own deliberations as to the merit or demerit of such a Royal Commission proposal?

I call on Najib to immediately clarify that his response yesterday was not meant to be a directive to the Parliament Speaker to reject my motion for urgent debate for a Royal Commission of Inquiry on Monday and that he has no objections if Parliament conducts such a debate.   Nor was his statement  meant to be a directive to Barisan Nasional MPs to deprive  them of the right to freely and independently give their views on the Royal Commission proposal before a formal decision is made by the Prime Minister and the Cabinet.

Najib should not be so quick “on-the-draw” to dismiss the proposal for a Royal Commission of Inquiry, especially as he is one of the over half-dozen Ministers who were in the Cabinet both during the Tajudin-MAS acquisition in 1994 and Tajudin MAS sell-back in 2000 as well as the RM30 billion Bank Negara forex losses 1992-1994.

In 1995, a book on international high finance, The Vandal’s Crown by Gregory J. Millman had this to say about the Bank Negara forex scandal:

"Using all the resources a central bank commands - privileged information, unlimited credit, regulatory power, and more - Malaysia’s Bank Negara became the most feared trader in the currency markets. By trading for profit, Bank Negara committed apostasy against the creed of central banking. Instead of working to ensure global financial stability, Bank Negara repeatedly shoved huge sums of money into the most vulnerable market situations in order to destabilize exchange rates for its own profit" (p.226)

"(Bank) Negara operated behind a thick veil of secrecy. The bank seldom spoke publicly about its controversial trading activities. Yet it was increasingly clear to foreign exchange traders that Bank Negara’s operations in the foreign exchange markets went far beyond simple self-defense. It became the most awesome currency trader in the world." (p. 227)

"(Bank) Negara’s market manipulation was so egregrious that one American central banker said, ‘If they tried this on any organized exchange in the world, they’d go to jail.’ However, in the unregulated international currency markets, there were neither police nor jailers. The only rule was the rough justice of the vandals, and it was this rule that eventually brought (Bank) Negara down.

"In 1992, (Bank) Negara took on a large pound sterling position, apparently expecting Britain to maintain the discipline required by the European Exchange Rate Mechanism. It was a bad economic and political judgement. (Bank) Negara lost approximately $3.6 billion when Britain withdrew from the ERM, letting sterling collapse. The next year, (Bank) Negara lost an additional $2.2 billion. By 1994, Bank Negara was technically insolvent and had to be bailed out by an infusion of fresh money from Malaysia’s finance ministry." (p.229)

It is time Malaysians know the unvarnished facts and truths about the various mega-financial bailouts and scandals, whether Tajudin-MAS buy-out and sell-back, Bank Negara forex losses or other blockbuster misappropriations of the public purse.

(08/07/2006)