Wall Street titan Goldman Sachs 'cheated' Malaysia: PM | Inquirer News

Wall Street titan Goldman Sachs ‘cheated’ Malaysia: PM

/ 09:04 PM November 13, 2018

SINGAPORE, Singapore — Goldman Sachs “cheated” Malaysia, its leader Mahathir Mohamad said, after two former bankers from the Wall Street titan were charged over a scandal that allegedly saw billions looted from state coffers.

The US Justice Department unveiled criminal charges this month against ex-Goldman bankers Tim Leissner and Ng Chong Hwa, accusing them of working with a Malaysian financier to launder huge sums allegedly stolen from sovereign wealth fund 1MDB.


They are accused of involvement in a sophisticated fraud linked to former leader Najib Razak, allegations that played a big factor in the shock defeat of his long-ruling government at polls in May.

In an interview with broadcaster CNBC, Prime Minister Mahathir said that “obviously we’ve been cheated”, when asked about Goldman’s dealings in Malaysia.


“There is evidence that Goldman Sachs has done things which are wrong,” said the 93-year-old, who is in his second stint as premier after coming out of retirement to take on Najib, his former protege.

Asked about Goldman’s compliance controls — which are supposed to monitor and prevent risky behaviour at the bank — Mahathir responded: “It does not work very well.”

In later comments in Singapore, where he is due to attend a regional summit, Mahathir suggested Malaysia could take action against Goldman if it was found to have broken the law.

“If the law says that somebody has committed a crime, then he should be accordingly punished through the process of law,” he said. “It doesn’t matter who — it may be Goldman Sachs, it may be whoever.”

Goldman Sachs did not immediately respond to requests for comment.

The US Department of Justice, which has also launched civil suits seeking to claw back assets in the US allegedly bought with stolen 1MDB cash, estimates that $4.5 billion was looted from the fund.

Mahathir said that it could take time, but US officials have promised to give back any money they recover.


Leissner and Ng have been charged with money-laundering and conspiring to bribe officials in Malaysia and Abu Dhabi to hire Goldman for lucrative consulting contracts.

Goldman underwrote $6.5 billion of bonds issued by 1MDB but US authorities allege that more than $2.7 billion was siphoned off.

Goldman earned $600 million in fees for the bond issue.

Leissner pleaded guilty and has agreed to pay $43.7 million in restitution of ill-gotten gains. Ng has been arrested in Malaysia.

Malaysian financier Low Taek Jho was also charged by the DoJ. Low, allegedly a central figure in looting 1MDB, remains at large.

Goldman Sachs has not been charged over the scandal but its shares fell heavily this week after Malaysia’s finance minister said he wanted a full refund of fees paid to the bank.

In a further blow to the bank’s image, it has emerged that former chief Lloyd Blankfein met with Low at a private reception in a New York hotel in 2009. /ee

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