After 1MDB scandal, finance minister keen for Malaysia to be ‘boring’ democracy

Finance Minister Lim Guan Eng said the government intent to go after its debtors, including three Goldman subsidiaries. ― File picture by Sayuti Zainudin
Finance Minister Lim Guan Eng said the government intent to go after its debtors, including three Goldman subsidiaries. ― File picture by Sayuti Zainudin

KUALA LUMPUR, Jan 15 — Lim Guan Eng hopes Malaysia can be a “normal, boring democracy” under Pakatan Harapan (PH) instead of the turbulent days under the Barisan Nasional (BN) administration when the country was shamed as a “global kleptocracy”.

The finance minister also told US broadcaster CNN in a recent interview in Hong Kong that he thinks US$7.5 billion (RM30.7 billion) is a “reasonable” amount for Malaysia to ask Goldman Sachs to pay back as the investment bank, and not just a few “rogue” employees, was the financial adviser for debt-saddled 1Malaysia Development Berhad (1MDB).

“I want to be a normal, boring democracy where there are no financial scandals. No more 1MDB. No more Jho Low. And of course, no more former PM,” he told CNN’s Kristie Lu Stout on News Stream programme.

Jho Low refers to Penang-born Low Taek Jho who is wanted by the PH government to stand trial for money laundering billions of dollars allegedly siphoned from the sovereign investment fund set up by former prime minister Datuk Seri Najib Razak over 10 years ago.

Lim was asked if he believed Low was currently hiding out in China’s coastal city of Guangzhou, but only said: “I think that information is at the moment speculative”.

Instead, he said the matter of greater import was Najib’s decision to allow a fresh graduate “to do as he pleased” with the country’s public funds.

In recent interviews with various foreign media, Lim has expressed the PH government’s intent to go after its debtors, including Goldman, whom it asserts owes it in excess of US$600 million in fees paid for its arrangement of three bonds in 2012 and 2013.

He said the government’s zeal was in part driven by its desire for Malaysians to “to hold their heads up high again”, following the country’s tattered reputation over the financial scandal.

Last month, Malaysia filed criminal charges in the US against three Goldman subsidiaries — Goldman Sachs International (UK), Goldman Sachs (Singapore) Pte, and Goldman Sachs (Asia) LLC.

The government is looking for reparation beyond the sum of its losses in excess of US$600 million fees paid to Goldman and three bonds arranged by the bank for 1MDB in 2012 and 2013.

Lim said Goldman was overpaid 100 basis points higher than the market rate for services not rendered, which was a clear breach of the bank’s fiduciary duties.

He added that Malaysia will do whatever it takes to ensure justice is done, including making Goldman accountable for its institutional breach and not escape by pinning it on a few “rogue individuals.

“How can you disclaim responsibility when you collected such a huge amount of fees, and at the same time you were of course broadcasting the fact that you were representing Malaysia.

“I don’t think they can run away so easily,” he told CNN.

Lim was confident that Goldman would have a tough time arguing ignorance when Tim Leissner, the top executive in charge of 1MDB and had full access to the bank’s then CEO Lloyd Blankfein, had pled guilty during trial in the US court.