KUALA LUMPUR, Nov 28 — US investment banking goliath Goldman Sachs must repay Malaysia “significantly more” than the US$600 million (RM2.52 billion) it collected to raise bonds for 1MDB, said PKR president Datuk Seri Anwar Ibrahim.
In an interview with the Financial Times published today, a “disgusted” Anwar insisted that the bank’s alleged collusion with fugitive financier Low Taek Jho to defraud Malaysia via the state investment firm has inflicted severe damage to the country’s reputation.
Among others, he said the 1MDB scandal has shaken global investors’ faith in Malaysia while at the same time leaving the country’s public finances in too poor a health for the new Pakatan Harapan government to ably execute its intended policies.
Anwar said Goldman Sachs was directly responsible for fuelling the financial crimes, accusing it of providing the masterminds of the 1MDB scandal “credibility” with which to execute their fraud that has direct financial costs to the country.
“For them to use a country like Malaysia — which is struggling to reform itself economically, moving up the ladder — really, to me, it’s disgusting,” he told the London-based outlet.
When asked by the interviewer if it would suffice for Goldman Sachs to refund the US$600 million it earned from 1MDB, Anwar said the bank should be obliged to pay “significantly more” than just the principal sum.
A spectacle for the rest of the world, the 1MDB scandal has had serious repercussions to the integrity of Malaysia’s institutions after several agency heads were removed over alleged omissions or direct complicity in the scandal.
Aside from ex-prime minister Datuk Seri Najib Razak who has been charged with multiple counts of money laundering over the scandal, the controversy has also swept up various former officials including a former attorney-general, a former auditor-general and a former governor of the central bank, among others.
According to US prosecutors previously, the investment bank generated an “above average” US$600 million in fees for its work with 1MDB, which included three bond offerings in 2012 and 2013 that raised US$6.5 billion.
This has since been shown to involve corrupt payments to government officials in Malaysia and the UAE.
Despite the ramifications to Malaysia’s institutions and financial markets, Goldman Sachs has so far escaped direct consequences of its alleged role in the scandal, choosing to blame “rogue” employees such as former South-east Asia head Tim Leissner.
Leissner pleaded guilty to criminal charges in the US related to 1MDB scandal while another former Goldman Banker, Roger Ng, is awaiting extradition to face trial there.
However, previous reports suggest that the bank’s complicity could reach its very top, after sources within the US investigation into the matter disclosed that Goldman Sachs chairman Lloyd Blankfein had a direct hand in cementing the relationship that had caused misgivings even among the bank’s own regulators.
When asked by the FT how Malaysia should pursue this compensation, Anwar said this could be also done through “aggressive negotiations” or, if that fails, litigation.
Attorney-General Tommy Thomas is reportedly preparing to file a lawsuit against Goldman Sachs in the US seeking US$4.5 billion in damages over the bank’s alleged role in facilitating the financial fraud at 1MDB.
