Malaysia wants $7.5bn from Goldman over 1MDB: report

Parvez Jabri December 21, 2018

KUALA LUMPUR: Malaysia’s finance minister wants Goldman Sachs to pay $7.5 billion in reparations over its dealings with scandal-hit state fund 1MDB, a report said Friday, adding to the Wall Street giant’s woes.

Billions of dollars were purportedly stolen from the fund and used to buy everything from yachts to artwork, in an audacious fraud that allegedly involved former Malaysian leader Najib Razak and contributed to his government’s shock defeat in May elections.

Goldman is facing growing scrutiny over its links to 1MDB as the bank helped arranged three bond issues worth $6.5 billion for the investment vehicle.

Malaysia this week filed criminal charges against the bank and two of its former employees, alleging they took part in a scheme to steal huge sums while raising cash for the fund.

Finance minister Lim Guan Eng told the Financial Times that Goldman should return the $6.5 billion raised in the bond issues plus $1 billion, to cover fees they earned plus interest payments on the bonds.

“We are not only looking at just the (bond) fees and issuance (volumes). We are looking for a much larger sum,” Lim said.

Goldman has previously said it will fight the charges brought against it by Malaysian authorities and that members of the former government in Kuala Lumpur and 1MDB employees lied to the bank.

In a response to Lim’s comments, Goldman noted that a huge portion of money raised in the bond issues was “stolen for the benefit of members of the Malaysian government and their associates”, the Financial Times reported.

The ex-Goldman bankers named in the Malaysian charges are Tim Leissner, who worked as Southeast Asia chairman, and former managing director Ng Chong Hwa.

Ng appeared before a Kuala Lumpur court on Wednesday and pleaded not guilty.

He has also been indicted in the US, and American officials are seeking his extradition.

Leissner has been indicted in the US and has pleaded guilty.

Malaysia also hit fugitive financier Low Taek Jho, a suspected mastermind of the 1MDB fraud, with new charges ths week. He maintains his innocence.

Copyright AFP (Agence France-Press), 2018

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