EPF Paid For Bank Negara’s RM31.5 Billion Losses

Those billions which EPF helped Bank Negara make should have gone to those EPF depositors. Instead it went to Bank Negara to cover the bank’s losses. And because of that EPF had to pay its depositors a smaller dividend. And people were left wondering why EPF’s dividend payout was getting smaller and smaller. Well, that was because EPF was helping Bank Negara hide RM25.8 billion in losses by transferring EPF’s profits to Bank Negara.

THE CORRIDORS OF POWER

Raja Petra Kamarudin

Yesterday, Tun Dr Mahathir Mohamad’s lawyer, Mohd Haniff Khatri Abdulla, issued a statement saying that Anwar Ibrahim did not lie to the Cabinet back in 1994. But then Mahathir said he does not know what happened because the Bank Negara Governor and not him was in charge. So how would Mahathir’s lawyer know that Anwar did not lie to the Cabinet back in 1994? If you do not know what happened then you would not know whether Anwar did or did not lie.

The problem is in 1993 Anwar lied to Parliament by saying Bank Negara did not lose any money gambling on the forex market and that the rumours were lies. Then, in 1994, Anwar admitted to Parliament that Bank Negara did, in fact, lose money from 1988 to 1992 but then the losses were small and only ‘paper losses’.

Anwar then told the Cabinet something else — that Bank Negara lost only RM5.7 billion but it was ‘deferred expenditure’ and ‘unrealised losses’.

Lim Kit Siang, however, disputed this and said Anwar lied and that Bank Negara’s losses were actually RM30 billion. And for more than 20 years since 1994 Kit Siang has been repeating this mantra and has been asking for a Royal Commission of Inquiry (RCI) to be set up to establish the truth.

Mahathir’s statement yesterday, issued through his lawyer, that the Cabinet was told the truth back in 1994 was a serious mistake. His lawyer should have advised Mahathir to not issue this statement. Only a stupid lawyer would issue such a statement and end up digging an even deeper hole, which this time Mahathir may find difficulty getting out of.

The suggestion that Prime Minister Najib Tun Razak should have testified at the RCI is also stupid. All the RCI needs to do is to review the Minutes of the Cabinet Meeting and the Parliament Hansards to see what was said in 1994. You can even read the Parliament Hansards on the Internet. What Parliament and the Cabinet were told are all on record.

When lawyers issue a statement on behalf of their client it is always at the behest of the client. Lawyers would never commit themselves to anything unless they first refer to the client and take instructions from the client. Therefore the statement that Mahathir’s lawyer issued yesterday is at his behest and based on his instructions.

Billions were secretly transferred from EPF to Bank Negara to cover the RM25.8 billion ‘hidden’ loss

Mahathir’s lawyer should have advised him to stop talking and not make any statement that damages things even further. As it is the ‘official’ figure that Bank Negara lost gambling on the forex market is RM5.7 billion. But then Bank Negara lost RM31.5 billion. So about RM25.8 billion is unaccounted for or is ‘missing in action’.

The fact that Bank Negara ‘officially’ lost RM5.7 billion is one thing. More importantly is what happened to another RM25.8 billion and why has this loss not been declared? And if the loss, as Mahathir said, is ‘normal’ (because when you gamble sometimes you win and sometimes you lose) then why the need to hide this loss? Why not declare it?

This is a more important point. It is not about the RM5.7 billion declared loss but the RM25.8 billion undeclared loss. And if the undeclared loss of RM25.8 billion was not lost gambling on the forex market then it must have been lost in ‘other ways’. And what ‘other way’ was this RM25.8 billion lost?

Bank Negara could survive a RM5.7 billion loss but not RM31.5 billion so RM25.8 billion had to be hidden

Mahathir wants Malaysians to believe that Bank Negara’s losses were only RM5.7 billion and not RM31.5 billion for many reasons. First of all, if Bank Negara’s losses were RM31.5 billion then that means Bank Negara was technically bankrupt. Bank Negara could survive a loss of RM5.7 billion because of its reserves but it could not survive a loss of RM31.5 billion. A loss of RM31.5 billion would bankrupt Bank Negara.

So it is important that the losses ‘officially’ be stated in the books at RM5.7 billion and not RM31.5 billion.

But then if you do this you raise another problem. And that problem is how do you account for the difference of RM25.8 billion? Where did that money go? What happened to another RM25.8 billion? Who took that money?

How did Mahathir and sons become billionaires unless the money was illegally gained, possibly by robbing Bank Negara?

It is now very clear that Bank Negara lost RM31.5 billion and not RM5.7 billion. The only question that needs answered is what happened to the difference of RM25.8 billion? But the questions do not stop there. Bank Negara can survive a loss of RM5.7 billion. It cannot survive a loss of RM31.5 billion. A RM31.5 billion loss would bankrupt Bank Negara. So that means Bank Negara needed to be bailed out.

And that is what Mahathir does not want Malaysians to know. Bank Negara was technically bankrupt so it needed to be bailed out. And they used MAS, TNB and Telekom Malaysia to bail out Bank Negara. They bought and sold MAS, TNB and Telekom shares to show paper profits and then ‘booked’ the profits.

First Bank Negara sold the MAS shares to Tajudin Ramli for a huge profit of RM8.00 per share. Then EPF acquired TNB (the largest publicly-listed power company in Southeast Asia) and Telekom shares at par, and sold those shares to Bank Negara also at par, which Bank Negara then sold off for a huge profit.

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Basically, Bank Negara bought and sold shares in three of Malaysia’s largest listed GLCs and made s huge profit to cover the RM31.5 billion losses. So Malaysian taxpayers eventually paid for Bank Negara’s losses. The profit on the MAS, TNB and Telekom shares, which should have gone to EPF, and hence to those who have money in EPF, went to Bank Negara instead to cover and hide the losses Bank Negara made.

Those billions which EPF helped Bank Negara make should have gone to those EPF depositors. Instead it went to Bank Negara to cover the bank’s losses. And because of that EPF had to pay its depositors a smaller dividend. And people were left wondering why EPF’s dividend payout was getting smaller and smaller. Well, that was because EPF was helping Bank Negara hide RM25.8 billion in losses by transferring EPF’s profits to Bank Negara.

Mahathir’s lawyer, Mohd Haniff Khatri Abdulla, made the matter worse by saying they never lied in 1994 hence raising a new question of what happened to the RM25.8 billion hidden losses

This was basically a chain-reaction. Bank Negara lost more money than it had in reserves so technically it was bankrupt. It had to save itself from bankruptcy so Bank Negara declared a smaller loss of RM5.7 billion and hid the larger loss of RM25.8 billion.

But then Bank Negara had to pay off this RM25.8 billion loss to continue to hide it. And to hide this RM25.8 billion loss Bank Negara had to make a profit from somewhere. So Bank Negara used the profit from buying and selling MAS, TNB and Telekom shares to offset the RM25.8 billion loss.

In essence, Bank Negara had to rob Peter to pay Paul. So, for Bank Negara to make a profit from buying and selling MAS, TNB and Telekom shares, EPF had to lose. The government gave the shares to EPF (at cost). EPF then transferred those shares to Bank Negara for no profit — allowing Bank Negara to make that profit instead.

In the end, all those Malaysians who had savings in EPF paid for this misadventure. Bank Negara made money at the expense of EPF and ultimately at the expense of the EPF investors. But the question is, while EPF and Bank Negara both lost RM25.8 billion, who was the one who made the money if that money, as Mahathir says, was not lost gambling on the forex market?

Where the hell is Sherlock Holmes when you need him?

What happened to RM25.8 billion if Bank Negara lost only RM5.7 billion and not RM31.5 billion gambling on the forex market?