Forex: BNM's way of interpreting the law not fully accepted by AGC - Witness

Head of the Advisory Services at the Attorney General's Chambers (AGC), Tan Sri Ainum Mohamed Saaid told the Royal Commission of Inquiry (RCI) investigating Bank Negara Malaysia's (BNM) foreign exchange (forex) losses in the 1990s, that the central bank's way of interpreting the law was not fully accepted by AGC.

She was referring to a letter from BNM, with the title 'Foreign Exchange Transactions By Bank Negara Malaysia', dated Feb 9, 1990 and signed by then adviser of the central bank's Bank Department, Tan Sri Nor Mohamed Yakcop.

Following which, Ainum, 71, said the AGC wrote a letter, dated Feb 21, 1990 and titled 'Forex Trading By Bank Negara' , to the Auditor-General and BNM governor with advise on how to interpret the law on forex trading.

She said the content of the letter, which was duly discussed with then Attorney-General Tan Sri Abu Talib Othman, also contained advice for the issue on whether the forex trading by BNM breached provision in the Central Bank of Malaysia Ordinance 1958 to be decided by the National Audit Department and BNM.

Ainum, in reading her witness statement, also said the AGC was only responsible for interpreting the law, but it could not provide advice on BNM's financial activities as it did not have the expertise.

"The Attorney-General's Chambers has no obligation to provide answers and guidance on questions concerning legal issues that were raised by the Auditor-General, instead it can only offer legal advice.

"But in the issue raised by the Auditor-General, it required specialist, expert with knowledge on finance which we don't have and neither the Attorney General Chambers is authorised to decide on this financial matters," she said during the proceeding at the Palace of Justice here today.

Ainum, who joined the legal and judiciary service in 1970 as a magistrate in Ipoh, said she knew the former Assistant Auditor-General P. Kanason and had discussed with him on BNM forex trading.

However, she said, she could not remember the words during her telephone conversation with Kanason on "orang atasan cakap jangan masuk campur" (people higher up say not to interfere).

"As far as I can remember, I did tell him (Kanason) that the AGC would give a written advice," she said.

The proceeding, which was opened to the public, was held in a court room of the Court of Appeal and chaired by Tan Sri Mohd Sidek Hassan.

Mohd Sidek, who is also Petronas chairman, is assisted by High Court judge Datuk Kamaludin Md Said and Bursa Malaysia Berhad CEO Datuk Seri Tajuddin Atan, Special Task Force to Facilitate Business (Pemudah) co-chairman Tan Sri Saw Choo Boon and Malaysian Institute of Accountants member, K. Puspanathan.

The RCI is secretary is Datuk Dr Yusof Ismail, who is the Finance Ministry's Strategic Investment Division secretary. -- BERNAMA