In Parliament, finance minister reveals letter by ex-AG Thomas recommending settlement with Goldman Sachs

Finance Minister Tengku Datuk Seri Tengku Zafrul Abdul Aziz (pic) says Tan Sri Tommy Thomas had proposed Malaysia settle its 1MDB claim on US investment bank Goldman Sachs out of court when he was attorney general. — Picture by Miera Zulyana
Finance Minister Tengku Datuk Seri Tengku Zafrul Abdul Aziz (pic) says Tan Sri Tommy Thomas had proposed Malaysia settle its 1MDB claim on US investment bank Goldman Sachs out of court when he was attorney general. — Picture by Miera Zulyana

KUALA LUMPUR, Aug 6 ― Tan Sri Tommy Thomas had proposed Malaysia settle its 1Malaysia Development Berhad (1MDB) claim on US investment bank Goldman Sachs out of court when he was attorney general (AG), Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz told the Dewan Rakyat today.

Tengku Zafrul said the proposal was conveyed in a letter to then prime minister Tun Dr Mahathir Mohamad.

“This is against what he had earlier recommended for the Pakatan Harapan government, which was to not accept settlement outside of court,” he said.

He added that in the letter, the then AG indicated that Goldman Sachs was agreeable to increase the settlement sum from US$1.5 billion (RM6.28 billion) to US$1.75 billion.

According to Tengku Zafrul, the figure was inclusive of US$164 million in taxes and US$567 million fees paid to Goldman Sachs.

“At all material time, the former AG was also seeking a settlement with Goldman Sachs.

“It is therefore disingenuous of him to say we would not have done exactly what he wanted to do in the first place,” said Tengku Zafrul.

Prior to revealing the letter which he claimed was not showed to the public, the appointed Senator by the PN government said on December 13, 2019, a record showed that the Pakatan Harapan (PH) government offered a US$4 billion settlement to Goldman but it was rejected by the bank who in return made a counter-offer of US$1.5 billion.

Tengku Zafrul was responding to a question by PAS’ Pasir Mas MP Ahmad Fadhil Shaari, who asked if it was true that the government had allegedly made the decision to settle for US$ 3.9 billion (RM16.7 billion) in a hurry.

Previously reported, Goldman had agreed to pay US$2.5 billion in cash and US$1.4 billion in assets to the Malaysian government, totalling to US$3.9 billion.

When Tengku Zafrul was about to continue his winding up speech, he was interjected by Umno’s Pontion MP Datuk Seri Ahmad Maslan, who asked the former has the letter, and if the former A-G and Dr Mahathir had lied to Malaysians.

In response to this, he said through latest negotiations, the government had managed to get US$2.5 billion in cash, and that it is 42 per cent higher than what was last agreed by Tommy.

“This amount does not include tax payment (mentioned earlier). On top of that, we will get US$1.4 billion in assets return and (a separate) tax payment.

“With this, the total we are receiving including the ones from the DoJ (Department of Justice) is more than US$4.5 billion.

“But the government is still committed to claim other assets that yet to be returned and this settlement does not jeopardise the government’s demand towards any individuals or companies linked to the scandal (1MDB),” he said.

This reply then sparked DAP’s Damansara MP Tony Pua who has been championing 1MDB-related issues, to stand up and interject Tengku Zafrul defending the former AG.

“Did the letter by Tommy said that the PH government was going to accept the US$1.75 billion settlement? As far as I know, the PH government then had rejected the amount.

“Tommy also did not say that the government should not go for an out of court settlement.

“So it is disingenuous of you to say that he did. He said the best time to do it (out of court settlement) is after the Goldman and its directors have been hauled to court to face charges.

“I quote him (Tommy) ‘this will give Malaysia the maximum leverage’,” said Pua.

Tengku Zafrul however in response said, although the case against Goldman and its 17 directors were registered during the PH government, none of them have actually been charged in court.

“The charge submission has yet to be done and if Malaysia wants to charge all 17 directors, all 17 will have to be extradited to Malaysia.

“The process was never done by him (Tommy) when he was AG, if he had, it would definitely be opposed by the 17 directors who still don’t know if they could even be extradited to Malaysia,” he said.

At this reply, it agitated DAP’s Bagan MP Lim Guan Eng, who was finance minister during the PH administration, who said if the US$3.9 billion was a settlement approved by the PN government as such a huge amount cannot be determined by just one or two individuals.

“It seems as though this decision was made by two people, not the Cabinet. An important matter like this must go through the Cabinet.

“Did the Cabinet approve this amount?” Lim asked repeatedly, but only to get no answer from Tengku Zafrul.

By then several Umno MPs including Arau Datuk Seri Shahidan Kassim and Baling MP Datuk Seri Abdul Azeez Abdul Rahim told Tengku Zafrul that he need not answer as the government has the right not to answer.

This had caused an uproar in Parliament, with Abdul Azeez calling Lim a ‘liar’ and that Lim was misleading the House.

To calm the MPs from both divide, Dewan Rakyat Speaker Datuk Azhar Azizan Harun who seemingly defended Tengku Zafrul said the Finance Minister would have definitely brought the matter to the Cabinet.

“It was agreed by the Cabinet that the AG has been given the mandate to find solution,” Tengku Zafrul replied.

However, the floor had broken into chaos, which prompt Azhar to adjourn the meeting abruptly, amid MPs from both divides still yelling at each other.

Tengku Zafrul is the only minister who did not manage to address debate questions this week, despite being asked by Opposition MPs to answer their queries made in last week’s debate on the King’s speech.

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