Ex-AG Tommy Thomas says no reason to settle with Goldman, had 'very strong' case against latter

Thomas contended that a conviction would have also resulted in at least the same amount being repaid to Malaysia in the form of penalties, based on precedent. — Picture by Firdaus Latif
Thomas contended that a conviction would have also resulted in at least the same amount being repaid to Malaysia in the form of penalties, based on precedent. — Picture by Firdaus Latif

KUALA LUMPUR, Aug 3 — Former attorney general Tan Sri Tommy Thomas said he saw no clear motivation for the federal government to settle what was a “very strong” criminal case against US investment bank Goldman Sachs in return for US$2.5 billion in compensation.

In a letter published on The Edge Markets website, Thomas also contended that a conviction would have also resulted in at least the same amount being repaid to Malaysia in the form of penalties, based on precedent.

He explained that this was why he proceeded with charges against Goldman Sachs and its directors in Malaysia, which he also said would likely have resulted in prison sentences against those accused that could have served as further leverage.

“There are no objective reasons to have reached a settlement at this point in time. What ought to have happened was to start the criminal trial against Goldman Sachs and its directors.

“From Malaysia’s perspective, any settlement should have only taken place in the middle of the trial or after the verdict is announced,” Thomas said in his letter.

Responding to Finance Minister Datuk Seri Tengku Zafrul Aziz’s remark that the settlement achieved was higher than the US$1.75 billion offered to the previous Pakatan Harapan government, Thomas agreed but said this was also why it was rejected.

Thomas also contended that the remainder of the bank’s settlement with Malaysia — US$1.4 billion in assets to be recovered — were already included in the US Justice Department’s kleptocracy action over 1MDB.

“Malaysia’s right to receive the US$1.4 billion was not in any way dependent on the Goldman Sachs settlement.”

Last week, it was reported that the US investment bank has reached a settlement with the Malaysian government over the multibillion-dollar 1MDB scandal.

The two sides reportedly said the deal includes a US$2.5 billion cash payout by Goldman and a guarantee by the bank to return at least US$1.4 billion in assets linked to the bonds.

In December 2018, the Attorney General’s Chambers under Thomas filed four charges against three entities related to Goldman Sachs under Section 179 (c) of the Capital Markets and Services Act 2007 for failing to disclose material facts in a 1MBD bond issue.

The offence was punishable under Section 182 of the same Act by up to 10 years’ imprisonment and a minimum fine of RM1 million.

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