Kerajaan boleh memperoleh lebih banyak pampasan dari Goldman Sachs atas peranannya dalam tuduhan penyelewengan dana 1MDB jika tidak tergopoh-gapah, kata bekas menteri kewangan Lim Guan Eng.
Lim bersetuju dengan bekas peguam negara Tommy Thomas yang semalam mengatakan Goldman Sachs akan berada di bawah tekanan jika kes-kes jenayah terhadap pegawai banknya dibawa ke mahkamah, seterusnya memberikan Malaysia kelebihan dalam tawar-menawar yang lebih kuat dalam rundingan.
"Bertentangan dengan apa yang didakwa Menteri Kewangan, PN (kerajaan Perikatan Nasional) sebenarnya mengambil tindakan populis dan tidak pragmatik apabila kerajaan dengan tergopoh-gapah menuntut bayaran awal yang jauh lebih rendah.
"Tindakan pragmatik adalah seperti yang dinyatakan oleh Tommy Thomas, iaitu, tunggulah sehingga perbicaraan jenayah ke atas Goldman Sachs bermula agar dapat bayaran wang tunai secara langsung yang lebih besar dan wajar daripada GS," katanya dalam satu kenyataan hari ini.
Menteri Kewangan Tengku Zafrul Aziz semalam mempertahankan penyelesaian Putrajaya dengan Goldman Sach yang akan menyaksikan bank meminta wang tunai RM2.5 bilion dan jaminan RM1.4 bilion lagi mengenai pemulihan aset yang didakwa diperoleh menggunakan dana 1MDB yang dicuri.
Ditanya mengapa kerajaan PN tidak menuntut RM7.5 bilion seperti yang dituntut oleh kerajaan Pakatan Harapan (PH) sebelum ini, dia berkata dia memilih jalan penyelesaian yang pragmatik.
Zafrul juga mengecam pertuduhan jenayah yang diambil oleh kerajaan sebelumnya terhadap Goldman Sachs, dengan menyatakan bahawa tindakan saman sivil kerajaan PN lebih baik dan menghasilkan penyelesaian.
Thomas membantah hal ini, dengan menyatakan bahawa pertuduhan jenayah akan memberi tekanan yang lebih besar kepada Goldman Sachs dan juga mengkritik jaminan yang diberikan oleh bank, dengan menyorot bahawa pemulihan aset tersebut sudah dilakukan oleh Jabatan Kehakiman AS (DOJ).
Zafrul juga mempertahankan jaminan itu, dengan menyatakan bahawa Malaysia terdedah kepada risiko penilaian aset yang dipulihkan sementara jaminan Goldman Sachs akan memastikan jumlah minimum untuk aset yang dipulihkan.
Lim, dalam pernyataannya hari ini, mengatakan bahawa dia tidak mahu mengulas lebih lanjut mengenai perkara itu kerana dia ingin melihat bagaimana kerajaan akan respons terhadap kritikan Thomas.
Goldman Sachs bertanggungjawab mengatur tiga bon untuk 1MDB berjumlah AS$6.5 bilion, sejumlah besar dana itu kemudiannya disalahgunakan.
Bank itu mengatakan tidak tahu bahawa hasil yang disusunnya akan disalahgunakan dan telah meminta maaf kepada rakyat Malaysia atas skandal tersebut.
"Sangat jelas bahawa rakyat Malaysia ditipu oleh banyak individu, termasuk anggota tertinggi kerajaan sebelumnya," kata ketua pegawai eksekutif Goldman Sachs Group Inc. David Solomon sebelum ini. - mk
How Goldman Sachs Outsmarted Incompetent Finance Minister Zafrul To Settle For A Pittance $3.9 Billion...
When Tengku Zafrul Tengku Abdul Aziz was appointed as finance minister by backdoor Prime Minister Muhyiddin Yassin in March, we unveiled that the former chief executive of Malaysian banking group CIMB was the same superstar singer in a “Hebat Negaraku” music video – a four-and-a-half-minute clip designed to worship and suck up to then-PM Najib Razak.
To make matters worse, Zafrul was reportedly linked to Muhyiddin’s family. Apparently, Zafrul’s younger brother, Tengku Zuhri Tengku Abdul Aziz, is married to Fara Nadia Abd Rahim, whose elder sister Fara Ikma Abd Rahim is married to Muhyiddin’s eldest son Fakhri Yassin. Hence, Muhyiddin has indirect influence and control over the national coffers.
Some simpletons asked a hilarious question – what’s wrong that Zafrul sang a song of praise for Najib, the same crook who has just been sentenced to 12 years in prison and fined RM210 million after he was found guilty of all 7 charges of abuse of power, criminal breach of trust (CBT), and money laundering – involving RM42 million stolen from SRC International Sdn Bhd (a subsidiary of 1MDB)?
Even before the verdict last week, one can only feel sorry for the simpletons who still could not see the issue of appointing Zafrul as the finance minister. It’s not rocket science that as a CEO, he was paid to professionally and ethically run the bank, and not involved in activities like singing songs of praise for a prime minister, scandal-plagued or not.
Can you imagine Warren Buffett or Bill Gates doing the same drama to apple polish Donald Trump’s MAGA (Make America Great Again) political campaign? The appointment of Zafrul as finance minister by the prime minister is no longer about cronyism or nepotism, but screams of astounding incompetence, gross weakness and inability to protect the national interest.
The backdoor Perikatan Nasional government’s US$3.9 billion settlement with Goldman Sachs over the American bank’s role in the theft of 1Malaysia Development Bhd (1MDB) funds is the clearest proof that the country has been short-changed due to Zafrul’s incompetence and lack of intelligence to strike a good deal at the negotiation table.
There was a reason why Goldman Sachs, the world’s most powerful investment bank, was known as the “Giant Vampire Squid of Capitalism“. The financial institution prospers by relentlessly jamming its blood funnel into anything that smells like money. Did Zafrul expect a greedy capitalist like Goldman Sachs would give him a good settlement deal?
Yes, Goldman Sachs had sucked the lifeblood from people of Malaysia by making the country poorer to the tune of RM50.75 billion in debt as a result of 1MDB scandal. Would PM Muhyiddin Yassin, and Finance Minister Zafrul for that matter, dare deny the existence of such massive debt now that they are the government of the day?
At first, the pathetic Zafrul crowed non-stop about how the settlement amount was significantly higher than the US$1.75 billion (RM7.4 billion) offered under the Pakatan Harapan (PH) administration back in 2019. Which part of “Goldman Sachs offered US$1.75 billion, but rejected by the PH government” that the finance minister didn’t understand?
Goldman can even offer US$10 bucks just to test the water, or to insult the intelligence of the Malaysian government, but that doesn’t mean the government must foolishly accept it. The PH government did not demand for US$1.75 billion. So why did Zafrul boastfully claim that he got a better deal, when in fact the previous PH government’s demand was higher at US$7.5 billion?
As revealed by former finance minister Lim Guan Eng, the initial demand of US$7.5 billion (RM31.79 billion) was derived from the total outstanding 1MDB debt guaranteed by the government, which stood at RM31.7 billion. Even if Goldman Sachs agrees to pay this amount (US$7.5 billion), the country will still make a huge loss because it didn’t take into account interest payments.
If the remaining interest payments (which runs until 2038) are included, the debt would balloon to RM41.5 billion – an extra loss of close to RM10 billion that the taxpayers’ have to absorb. The interest payments alone are RM10 billion. Hence, the actual debt of 1MDB, if calculated until 2038, is RM50.4 billion (outstanding RM41.5 billion inclusive interests plus RM8.9 billion already paid by the government).
The US$3.9 billion settlement agreed and trumpeted by the idiot Zafrul, announced on July 24, 2020, included US$2.5 billion (RM10.6 billion) cash and a full recovery value of at least US$1.4 billion (RM5.9 billion) in proceeds from assets related to 1MDB seized by governmental authorities around the world – for a total amount of US$3.9 billion (RM16.5 billion).
Exactly how does the finance minister plan to pay RM41.5 billion debt with only RM16.5 billion? Perhaps the clueless and incompetent Muhyiddin government plans to raise taxes – even re-introduce the GST (goods and services tax) – to pay the deficit of RM25 billion. In essence, Goldman Sachs short-changed Malaysian government by RM25 billion.
1MDB Settlement - Goldman Sachs CEO David Solomon - Moron Finance Minister Zafrul Abdul Aziz
In fact, the American bank was so happy with the settlement that its chief executive David Solomon immediately went into celebration mode – moonlighting as a dance party DJ – in the Hamptons, despite New York’s social distancing requirements. About 2,000 people showed up to the party, including socialites and financial professionals. Clearly, Goldman had outwitted the sucker – Zafrul and his team.
Mr. Zafrul was so dumb that former Attorney General Tommy Thomas was forced to open his mouth to set the record straight after the finance ministry gave a half-baked cock and bull story in an interview with The Edge. Defending the deal, Zafrul keeps saying Goldman Sachs guarantees that Malaysia will receive US$1.4 billion in proceeds from assets over a period of 5 years.
It’s the U.S. Justice Department – NOT Goldman Sachs – that is doing all the dirty work of confiscating and returning to Malaysia all the assets purchased with stolen money from 1MDB funds. Either the finance minister was clueless or was absolutely dimwit to suggest that it was a fantastic deal due to the guarantee from Goldman, as if the bank was doing a charity.
Besides, why wait for 5 years to get US$1.4 billion in assets when the “Giant Vampire Squid” could be pressured to cough up more cash immediately. According to Sarawak Report, the bank has actually reserved a whopping US$10 billion for the settlement. In fact, over the past two years, Fitch Ratings estimated that Goldman has set aside at least US$3 billion in legal reserves alone.
In his attempt to belittle the criminal charges initiated by former Attorney General Thomas, the silly Zafrul argued that there is no imprisonment provision against a corporation. Of course you can’t send a bank to jail. For the finance minister to make such remarks in the first place shows he was either seriously retarded, incredibly inexperienced, has been smoking horrible grass or all of the above.
Did Zafrul realise that Malaysia is the first country in the world to prosecute Goldman Sachs as a company, filing charges in December 2018 against Goldman Sachs (Asia) LLC, Goldman Sachs International (UK) and Goldman Sachs (Singapore)? What was the strategic reason when (former) A.G. Tommy Thomas did that?
Did Zafrul also realise that in August 2019, Mr. Thomas has slapped separate charges against 17 current and former Goldman executives, whom it accuses of misleading investors by making false statements and omitting key facts in relation to the 1MDB-related bond issues worth US$6.5 billion. Again, what was the tactical reason for doing that?
Malaysia has a very strong case against all the accused. Under the leadership of Thomas, the Attorney General’s Chambers was confident that not only former Goldman executives would be sent to prison, but also all the Goldman Sachs companies would be ordered to pay compensation. But that was not the actual strategic and tactical reasons.
Attorney General Tommy Thomas - Constitutional Law Expert and Civil Litigator
The strategic and tactical reasons were to create bargaining power and leverage for Malaysia, as revealed by Thomas. Every layman can tell you that the bargaining power can only be created by starting a lawsuit and create maximum negative publicity against Goldman. However, Thomas was not crying wolf and certainly was not bluffing in this poker game.
Perhaps the clueless Muhyiddin government was unaware that Goldman was already in talks with the U.S. Justice Department to plead guilty to U.S. bribery laws and to pay a fine of US$2 billion amid allegations that at least one of its bankers was aware that flamboyant Malaysian financier Jho Low – whom Goldman had declined several times as a client – was involved in the 1MDB bond deals.
A.G. Tommy Thomas was leveraging on the fact that the Goldman Sachs’ banker, Tim Leissner, who is married to Kimora Lee Simons, has pleaded guilty in the 1MDB scandal, even though Goldman was expected to throw its former employees under the bus by maintaining that its senior management was unaware of criminal activity undertaken by certain “rogue” employees.
More importantly, Goldman could not afford to play the poker game with Malaysia. The sign of desperation was on the wall when the bank appealed to its highest ranks, with Attorney General William Barr overseeing the case personally. Goldman desperately wanted to reach a settlement before November’s presidential election, which could see the defeat of Donald Trump.
If Trump loses and Goldman failed to reach a settlement, Goldman Sachs has to start the process all over again with a new administration – the Democrats – that may be less friendly to Wall Street crooks like Goldman. Last month, the bank reported US$2.42 billion in net profit, or US$6.26 a share, crushing the US$3.78 a share estimate of analysts. Its revenue alone was US$13.3 billion.
Paying US$2.5 billion cash to Malaysia was like losing one quarter of profit – a small price to pay in exchange for dropping all criminal charges against the bank. Do you know how much Goldman would lose – in terms of credibility, monetary and reputation – if the bank is charged and the case drags for years? Dragging Goldman to the court is the best leverage to pressure the bank for a maximum payout.
American TV courtroom drama series has shown how guilty corporations would request for a settlement in the middle of a trial. In the case of 1MDB scandal, Goldman was already losing half the battle with Tim Leissner’s admission of guilt and the bank’s readiness to pay US$2 billion fines. Idiots like Finance Minister Zafrul and Attorney General Idrus Harun destroyed everything with a rushed and premature settlement.
All the hard work of the previous Pakatan Harapan government has gone to waste because Muhyiddin’s incompetent minions failed to use any leverage at the negotiation table. The inexperienced Zafrul was an easy meat to the American bank. Perhaps the entire team involved in the negotiation should be investigated for the possibility of having received “tokens of appreciation”. - FT
Goldman Sachs got away cheaply for USD2.5 billion
cash settlement, instead of USD 7.5 billion...
The international financial world sees Goldman as getting off cheaply by paying only one-third of the initial demand of US$7.5 billion made by the previous PH Malaysian government, in exchange for dropping criminal charges against the bank and 17 current and former Goldman directors.
Prime Minister Tan Sri Muhyddin Yassin announcement that global banking firm Goldman Sachs has agreed to a US$3.9 billion (RM16.63 billion) settlement with the Malaysian government on defrauding of 1MDB, cannot hide the fact that US$1.4 billion is not paid by Goldman Sachs but will come from assets of 1MDB seized by authorities around the world.
Former Prime Minister Datuk Seri Najib Tun Razak was sentenced on 28 July 2020 by the High Court to 12 years in jail and RM210 million in fines, after finding him guilty of all seven charges on money laundering, abuse of power and criminal breach of trust in the case involving RM42 million of funds deposited in his personal accounts from a former unit of troubled state fund 1MDB. Like Najib, if Goldman Sachs is found guilty, apart from imprisonment, they could be fined 5 times the amount defrauded.
The previous Pakatan Harapan (PH) Malaysian government had claimed USD7.5 billion to recover USD6.5 billion in the following three 10-year bonds arranged by Goldman Sachs guaranteed by the Malaysian government at an interest rate above the prevailing market rates of:
1. USD1.75 billion at 5.99% interest rate issued on 18 May 2012
2. USD1.75 billion at 5.75% interest rate issued on 17 Oct 2012
3. USD3.0 billion at 4.4% interest rate issued on 16 Mar 2013
The previous PH government had claimed USD 7.5 billion from Goldman Sachs, to include the additional USD1 billion to cover interest cost incurred for the bonds to date.
To forgo the initial USD 7.5 billion claim with only USD 3.9 billion ignores the huge debt burden of 1MDB.
The total 1MDB debt outstanding guaranteed by the Government is RM 31.7 billion ringgit. If the remaining interest payments till 2038 are included, the amount would increase to RM 41.5 billion.
This sum excludes the RM8.9 billion which have already been paid by the Government. This would bring the total cost of 1MDB to the country, including interest of the 1MDB debts, to RM 50.4 billion.
The deal to drop all criminal charges against Goldman Sachs for only 1/3 of the initial demand of USD 7.5 billion, follows the decision in May 2020 to discharge Najib’s step-son Riza Shahriz Abdul Aziz, from five money-laundering charges over US$248 million (RM1.08 billion) of funds siphoned from 1Malaysia Development Bhd (1MDB), in exchange for Riza returning USD 108 million.
Former Attorney-General Tommy Thomas commented that, “Riza Aziz is not offering to pay any new monies from any source other than United States’ Department of Justice’s (DoJ) seized assets. The US$108 million would in any event be returned to Malaysia by DoJ.”
Public interest and accountability demands that the Perikatan Nasional government answer whether justice is served on Malaysians, by allowing Goldman Sachs to pay one third of the initial demand of USD 7.5 billion in exchange for absolving Goldman Sachs of all criminal punishment, for their role as accomplices and complicity in the RM50.4 billion 1MDB scandal with top Malaysian leaders and their cronies? - Lim Guan Eng
Goldman Sachs settlement...
Despite multiple requests from the media, I refrained from commenting on the merits of the settlement that the Government of Malaysia reached with Goldman Sachs which was announced on 24th July 2020. As the person leading the negotiations in 2019 on behalf of the previous government, I felt that it was not proper for me to publicly comment. After all, it is the prerogative of the present government to reach a deal on whatever terms it wishes.
Regrettably, I have to set the record straight, and correct the misleading statements made by the Finance Minister, Tengku Zafrul in an interview published in your 3rd August 2020 issue.
EXCERPT OF INTERVIEW QUESTION AND ANSWER
“Why didn’t you just make the same demand as the PH government by proceeding with the charges and force them to pay?
Did the previous demands result in a concluded settlement? The criminal charges initiated by the former Attorney General against Goldman Sachs are for making untrue statements under Section 179 (c) of the Capital Markets and Services Act, 2007 (“CMSA”). There is no imprisonment provision against a corporation. The penalty would have been only a fine. The fine would not have been sufficient to cover the 1MDB losses suffered.
On the other hand, the current Attorney General Tan Sri Idrus Harun secured a settlement after intimating to Goldman Sachs of amended and new charges for fraud under Section 179 (a) and civil disgorgement claims under Section 199 CMSA. These entitled Malaysia to disgorge three times the fees (US$606 million x 3 = US$1.818 billion) earned by Goldman Sachs. These statutory claims are more robust and irrebuttable and resulted in the settlement. The USD$2.5 billion cash payment is 42% more than the offer received before.”
MY RESPONSE :
I charged the Goldman Sachs companies in December 2018. They were followed by charges against 17 of their Directors in August 2019. They would been tried jointly. We have a very strong case against all the accused, which we would have established at trial. We were confident that upon conviction, the trial court would in addition to sending the individual directors to jail, order the Goldman Sachs companies and the individuals to pay compensation.
The compensation that a criminal court would order would be on the same basis that a civil court would order under the CMSA, as occurred in 2 bond default cases in Malaysia, namely Pesaka and Aldwich.
Hence, there are 2 practical advantages of charging the companies and their directors in the criminal court. First, criminal charges ensure greater bargaining power for Malaysia. Secondly, the same court can order compensation or damages to reflect Malaysia’s losses arising from the 3 bonds that Goldman Sachs had designed and structured.
Any litigation lawyer would advise that the leverage that his client would have, whether as plaintiff in civil proceedings or as prosecutor in criminal proceedings, is to start a trial with the maximum negative publicity against the adverse party. This advantage was lost by the present administration because the settlement was rushed and premature. 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.
Separately, I would like to comment on 2 general matters raised by the disingenuous statements of the Finance Minister. First, that the settlement he reached was higher than the US$1.75 billion offered to the PH government. That is correct only because we rejected such a low offer, bearing in mind that Malaysia’s total exposure in principal and interest on the 3 bonds is USD9.6 billion. Secondly, the misleading statement about the US$1.4 billion as part of the Goldman Sachs settlement. Malaysia would have received this sum from the US Department of Justice, in any event, independent of this settlement with Goldman. This was because of the good relationship that Malaysia has established with the DOJ after the Pakatan Harapan government took office in May 2018. In other words, Malaysia’s right to receive the US$1.4 billion was not in any way dependent on the Goldman Sachs settlement. - Tan Sri Tommy Thomas