Malaysia takes Goldman Sachs to court with AG Tommy Thomas saying that the bank’s dealings with 1MDB broke laws at the heart of the capital markets; MRT Corp will be looking for a new CEO; and Unisem’s offer is “not fair or reasonable”.
PETALING JAYA: The Attorney-General Chambers has filed criminal charges against subsidiaries of investment bank Goldman Sachs and its key employees over the handling of bonds issued by 1Malaysia Development Bhd (1MDB) totalling USD6.5bil (RM27.2bil).
Attorney general Tommy Thomas said that charges were filed against Goldman Sachs' former Southeast Asia chairman Tim Leissner and former 1MDB employees Jasmine Loo Ai Swan and fugitive businessman Low Taek Jho, also known as Jho Low.
He added that banker Roger Ng Chong Hwa would be charged shortly.
Thomas said Leissner and Ng had conspired with Low, Loo and others to bribe Malaysian public officials in order to procure the selection, involvement and participation of Goldman Sachs in three Bond issuances.
He also said that the Goldman employees had not only received part of the misappropriated bond proceeds, but also received large bonuses and enhanced career prospects at the bank and in the overall investment banking industry.
"The charges arise from the commission and abetment of false or misleading statements by all the accused in order to dishonestly misappropriate USD2.7bil (RM11.3bil) from the proceeds of three bonds issued by subsidiaries of 1MDB, which were arranged and underwritten by Goldman Sachs," he said in a statement on Monday (Dec 17).
Thomas said the three bonds were the 10-year USD1.75bil (RM7.32bil) issued by 1MDB Energy Limited, the 10-year USD1.75bil (RM7.32bil) issued by 1MDB Energy (Langat) Limited and the 10-year USD3bil (RM12.6bil) issued by 1MDB Global Investments Limited.
Thomas added that the investment bank had benefited by receiving underwriting and arranging fees of approximately USD600mil (RM2.5bil), which was higher than market rates and industry norms.
Thomas also said the Offering Circulars and Private Placement Memorandum for the Bonds filed with the Labuan Financial Services Authority had also contained statements which were false, misleading, coupled with omissions of material.
"Offering Circulars and Private Placement Memorandum are serious documents, intended to be relied on, and, in fact, were relied on, by purchasers of the bonds.
"The scheme designed and crafted by the accused to fraudulently structure the bonds for ostensibly legitimate purposes when they knew that the proceeds thereof would be misappropriated and fraudulently diverted by the accused themselves was planned and executed in order to defraud the Government of Malaysia and the purchasers of the bonds," he said.
Thomas said their scheme had contravened Malaysia’s securities laws, particularly, Section 179 of the Capital Markets and Services Act, 2007 (Act 671).
"Malaysia considers the allegations in the charges against all the accused to be grave violations of our securities laws, and to reflect their severity, prosecutors will seek criminal fines against the accused well in excess of the USD2.7bil (RM11.3bil) misappropriated from the Bonds proceeds and USD600mil (RM2.5bil) in fees received by Goldman Sachs, and custodial sentences against each of the individual accused: the maximum term of imprisonment being 10 years," he said.
He said that if no criminal proceedings are instituted against the accused, their undermining of the financial system and market integrity will go unpunished.
“Having held themselves out as the pre-eminent global adviser / arranger for bonds, the highest standards are expected of Goldman Sachs. They have fallen far short of any standard. In consequence, they have to be held accountable,” he said. - The Star.
Malaysia takes Goldman Sachs to court with AG Tommy Thomas saying that the bank’s dealings with 1MDB broke laws at the heart of the capital markets; MRT Corp will be looking for a new CEO; and Unisem’s offer is “not fair or reasonable”.
PETALING JAYA: The Attorney-General Chambers has filed criminal charges against subsidiaries of investment bank Goldman Sachs and its key employees over the handling of bonds issued by 1Malaysia Development Bhd (1MDB) totalling USD6.5bil (RM27.2bil).
Attorney general Tommy Thomas said that charges were filed against Goldman Sachs' former Southeast Asia chairman Tim Leissner and former 1MDB employees Jasmine Loo Ai Swan and fugitive businessman Low Taek Jho, also known as Jho Low.
He added that banker Roger Ng Chong Hwa would be charged shortly.
Thomas said Leissner and Ng had conspired with Low, Loo and others to bribe Malaysian public officials in order to procure the selection, involvement and participation of Goldman Sachs in three Bond issuances.
He also said that the Goldman employees had not only received part of the misappropriated bond proceeds, but also received large bonuses and enhanced career prospects at the bank and in the overall investment banking industry.
"The charges arise from the commission and abetment of false or misleading statements by all the accused in order to dishonestly misappropriate USD2.7bil (RM11.3bil) from the proceeds of three bonds issued by subsidiaries of 1MDB, which were arranged and underwritten by Goldman Sachs," he said in a statement on Monday (Dec 17).
Thomas said the three bonds were the 10-year USD1.75bil (RM7.32bil) issued by 1MDB Energy Limited, the 10-year USD1.75bil (RM7.32bil) issued by 1MDB Energy (Langat) Limited and the 10-year USD3bil (RM12.6bil) issued by 1MDB Global Investments Limited.
Thomas added that the investment bank had benefited by receiving underwriting and arranging fees of approximately USD600mil (RM2.5bil), which was higher than market rates and industry norms.
Thomas also said the Offering Circulars and Private Placement Memorandum for the Bonds filed with the Labuan Financial Services Authority had also contained statements which were false, misleading, coupled with omissions of material.
"Offering Circulars and Private Placement Memorandum are serious documents, intended to be relied on, and, in fact, were relied on, by purchasers of the bonds.
"The scheme designed and crafted by the accused to fraudulently structure the bonds for ostensibly legitimate purposes when they knew that the proceeds thereof would be misappropriated and fraudulently diverted by the accused themselves was planned and executed in order to defraud the Government of Malaysia and the purchasers of the bonds," he said.
Thomas said their scheme had contravened Malaysia’s securities laws, particularly, Section 179 of the Capital Markets and Services Act, 2007 (Act 671).
"Malaysia considers the allegations in the charges against all the accused to be grave violations of our securities laws, and to reflect their severity, prosecutors will seek criminal fines against the accused well in excess of the USD2.7bil (RM11.3bil) misappropriated from the Bonds proceeds and USD600mil (RM2.5bil) in fees received by Goldman Sachs, and custodial sentences against each of the individual accused: the maximum term of imprisonment being 10 years," he said.
He said that if no criminal proceedings are instituted against the accused, their undermining of the financial system and market integrity will go unpunished.
“Having held themselves out as the pre-eminent global adviser / arranger for bonds, the highest standards are expected of Goldman Sachs. They have fallen far short of any standard. In consequence, they have to be held accountable,” he said. - The Star.
Goldman Sachs Group has acknowledged that it may receive “significant penalties” resulting from its deals with 1Malaysia Development Bhd (1MDB).
It also recognised that it had weaknesses in its compliance controls, The Wall Street Journal (WSJ) reported.
In its third-quarter earnings filing to regulators, the investment management firm made citations about the indictment against its former employees for bribery and money laundering involving 1MDB, WSJ said.
Although it had acknowledged that it could face “significant penalties resulting from 1MDB”, Goldman Sachs said it was also cooperating with investigators, the report on Monday said.
According to WSJ, Goldman Sachs wrote in the filing that the indictment alleged the firm’s “system of internal accounting controls could be easily circumvented and that the firm’s business culture, particularly in South-East Asia, at times prioritised consummation of deals ahead of the proper operation of its compliance functions”.
The filing also mentioned that former Goldman Sachs bankers Tim Leissner and Roger Ng had “circumvented the firm’s internal accounting controls in part by intentionally deceiving control personnel and internal committees”.
Goldman Sachs is said to have received nearly RM2.5bil (US$600mil) in fees from the 1MDB deal.
Previously, the Financial Times reported that Goldman Sachs had helped 1MDB sell about RM27bil (US$6.5bil) of bonds between 2012 and 2013, two years before the authorities raided 1MDB’s offices to investigate allegations of massive fraud.
In a filing to the Securities and Exchange Commission on Friday, Goldman Sachs estimated that possible losses related to litigation proceedings could run as high as US$1.8bil (RM7.49bil) above its total reserves for such matters.
Previously, Goldman Sachs estimated litigation losses to be in excess of US$1.5bil (RM6.24 bil).
The Financial Times also reported that almost 30 people from Goldman Sachs had reviewed 1MDB deal’s approval process.
Meanwhile, in a 2016 indictment, the US Department of Justice (DoJ) alleged that most of the money raised with Goldman Sachs’ help was siphoned off by Low Taek Jho, also known as Jho Low.
The fugitive businessman together with bankers Ng and Leissner were indicted by the DoJ on Thursday for conspiring to launder money and violating the Foreign Corrupt Practices Act in relation to 1MDB.
Leissner pleaded guilty to conspiring to launder money and to violating anti-bribery laws. He has been ordered to forfeit US$43.7mil (RM182.27mil) as a result of his crimes.
The criminal charges relating to 1MDB are the first by DoJ.
In 2016, the DOJ reportedly recovered over US$1bil (RM4.17bil being the current conversion rate) that was allegedly stolen, and sought the forfeiture of property, including a Bombardier private jet, Manhattan penthouse, Beverly Hills mansion and paintings by Vincent Van Gogh and Claude Monet.
Low is currently wanted in Malaysia and Singapore and other countries over investigations into 1MDB.
In a separate report by the Associated Press, PKR incoming president Datuk Seri Anwar Ibrahim said that Low would be given a fair trial.
Anwar said he was “quite pleased” with developments in the case so far and that investigations in the United States, Malaysia and Singapore and other places were “progressing very well”.
The report also said Anwar had hinted that more former officials could be tried on corruption charges.
Malaysia has applied for a Red Notice to seek assistance from countries such as the United Arab Emirates, Indonesia, India, Myanmar, China and Hong Kong via Interpol, and Taiwan via diplomatic channels to arrest Low. - The Star
Related posts:
Goldman Sachs CEO: I feel horrible ex-bankers broke law in 1MDB case
https://youtu.be/L0XbbbqTHYw
SINGAPORE (Reuters): Goldman Sachs chief executive officer David Solomon said on Wednesday he felt "horrible" that two former employees "blatantly broke the law" in their dealings with 1Malaysia Development Berhad.
US prosecutors filed criminal charges against the two former Goldman bankers and a Malaysian financier linked to the alleged theft of billions of dollars from the fund.
An investigation into where 1MDB's money went became the largest carried out by the Department of Justice under its anti-kleptocracy programme, and the scandal was a major reason why Malaysian voters rejected Datuk Seri Najib Tun Razak, their prime minister for nearly a decade, in the May 9 general election.
"It is obviously very distressing to see two former Goldman Sachs employees went so blatantly around our policies and so blatantly broke the law," Solomon said in an interview with Bloomberg TV in Singapore.
"I feel horrible about the fact that people who worked at Goldman Sachs, and it doesn't matter whether it's a partner or it's an entry level employee, would go around our policies and break the law," Solomon said.
US prosecutors announced last week that Tim Leissner, former partner for Goldman Sachs in Asia, had pleaded guilty to conspiracy to launder money and conspiracy to violate the Foreign Corrupt Practices Act, and agreed to forfeit US$43.7mil (RM181.8mil).
Roger Ng, the other charged former Goldman banker, was arrested in Malaysia and is expected to be extradited.
Reuters was not immediately able to contact Ng's lawyer on Wednesday. His lawyer did not immediately respond to a request for comment after US prosecutors unveiled the charges last Thursday.
Goldman has also placed its former co-head of Asia investment banking, Andrea Vella, on leave over his role in the firm's involvement with the case, pending a review of allegations, according to a person familiar with the decision.
The Wall Street bank said in a securities filing on Friday that it may also face penalties from dealings with 1MDB.
Asked if he could provide assurances that neither he, former CEO Lloyd Blankfein or any of the senior management team suspected illegality or compliance breaches in dealings with 1MDB, Solomon said:
"We take compliance and control in our firm extremely seriously, we always have...We are going to continue to cooperate with the authorities and there's a process in place and that process will proceed." According to prosecutors, the investment bank generated about US$600mil (RM2.49bil) in fees for its work with 1MDB, which included three bond offerings in 2012 and 2013 that raised US$6.5bil (RM23.29bil). Leissner, Ng and others received large bonuses in connection with that revenue.
Finance Minister Lim Guan Eng told Reuters in June that the government will be looking at the possibility of seeking claims from Goldman Sachs.
Prime Minister Tun Dr Mahathir Mohamad said Malaysia will look into why Goldman was paid around US$600mil in fees, an amount that critics say exceeds normal levels.
Goldman has maintained that the outsized fees related to the additional risks it took on after it bought the un-rated bonds while it sought investors and, in the case of the 2013 deal which raised US$2.7bil (RM11.24bil), 1MDB wanted the funds in a hurry for a planned investment.
The new Malaysian government has barred Najib and his wife from leaving the country, and the former premier faces multiple charges of corruption, money laundering and abuse of power, though he has consistently denied any wrongdoing related to 1MDB.
In another interview with Bloomberg on Tuesday, Malaysia's prime minister-in-waiting Anwar Ibrahim said it would be
"inexcusable" if Goldman Sachs was complicit in the scandal. – Reuters
American investment bank Goldman Sachs
should return the US$588mil (RM2.4bil) in it was paid for 1MDB-related
matters, says Lim Guan Eng.
The Finance Minister said the fees were for raising bonds totalling
US$6.5 billion (RM23.29 billion) for the Malaysian state investment firm
back in 2012 and 2013.
"They must pay us back this money, not only the US$588mil but much
more than that," he said during a briefing on Budget 2019 at Hotel
Equatorial Penang on Wednesday (Nov 7).
He said there were consequential losses due to the fees paid as it had cost Malaysia big losses.
This was in respond to Goldman Sachs chief executive officer David
Solomon, who admitted that their employees had broken the law over 1MDB
matters.
Read more at
https://www.thestar.com.my/news/nation/2018/11/08/guan-eng-goldman-sachs-should-return-rm2_4bil-fees/#wqMtc2F6O1jC35UJ.99
Malaysia legally challenges a consent award granted in 2017 to Abu Dhabi's sovereign wealth fund, International Petroleum Investment Company (IPIC), following a debt dispute with its state investment fund, 1Malaysia Development Bhd.
Under the consent award, Malaysia is obliged to pay US$5.78 billion to IPIC and the bond trustee over five years. The country has paid US$1.46 billion so far.
Below is the full media statement from Malaysia's attorney-general, Tommy Thomas, explaining why the country is filing the legal challenge.
https://youtu.be/q_hewkxdyp8
CHALLENGING THE IPIC ARBITRATION CONSENT AWARD
1. The Government of Malaysia will apply to the Courts of England for an order to set aside a Consent Award recorded on 9th May 2017 by an Arbitration Tribunal sitting in London. We are confident that we have a strong case. The Arbitration, conducted under the Rules of the London Court of International Arbitration, was between International Petroleum Investment Company (“IPIC”) and Aabar Investments PJS, as Claimants, and 1MDB and our Minister of Finance Inc., as Respondents.
2. Under the Consent Award, Malaysia is obliged to pay US$5.78 billion to IPIC and the Bond Trustee over a five year period. So far, US$1.46 billion has been paid, leaving a balance of US$4.32 billion, with the next interest payment of US$50 million due on 11th November 2018. Similar interest payments are payable periodically until April 2022. The final bullet payments, representing principal and interest of US$1.8 billion each, are due and payable in May and October 2022.
3. The basis of Malaysia’s legal challenge in the High Court in London is that the Consent Award was procured by fraud or in a manner contrary to public policy. The Court application relates to the knowledge of IPIC and Aabar of the serious allegations made by the United States Department of Justice (DOJ) against former Prime Minister and Finance Minister Najib Razak, who was also the moving spirit and ultimate decision maker in 1MDB. Such knowledge on their part was acquired, “inter alia”, no later than the time when the DOJ’s Press Conference was held by the Attorney General of the United States, Loretta Lynch, in July 2016 when she announced the filing by by DOJ of several civil suits for the freezing of assets purchased by fraudsters from stolen proceeds, and popularly described as the greatest kleptocracy in modern history.
4. The grave, detailed allegations in those DOJ court documents were given tremendous global publicity, particularly in the political and business media. They had certainly entered the global public domain by July 2016. Najib Razak is identified as “MO1” in the DOJ pleadings. Any reasonable reader reading these court documents would immediately become aware of his central role in defrauding 1MDB to the benefit of himself, his stepson and Jho Low.
5. In such circumstances, Malaysia takes the position that IPIC and Aabar were aware of the fraud of Najib Razak. He was principally responsible for 1MDB and Minister of Finance Inc. consenting to the Award. Every system of law would hold that he could not possibly have acted in the best interests of his country and his company. Indeed, he did not. Fraud is an established ground to challenge the consent award for public policy reasons.
6. We are pleased to report that the application will be filed today in the High Court in London. Malaysia will claim that as a result of the fraud, we are relieved from any obligation to pay the balance of the US$4.32 billion to IPIC or Aabar under the Consent Award, and additionally have a right to recover the US$1.46 billion already paid.
Settling the civil action would free up prosecutors to pursue the Goldman bond issued on behalf of 1MDB, which netted the bank suspiciously obsence commissions of up to 11% - Sarawak Report
Sarawak Report has learnt that Jho Low’s new legal team, headed by the well-connected former federal prosecutor and New Jersey governor Chris Christie, has already obtained a high-level meeting with officials of the DOJ and that at that meeting they offered to come to a settlement on behalf of the fugitive Malaysian advisor to 1MDB.
This would represent an effective acknowledgement by Low, who is currently believed to be holed up in China, that he is unlikely to be able to persuade the US courts to return some $1.2 billion in assets seized from him alone, which investigators have traced to money stolen from Malaysia’s development fund.
However, by cutting a deal the billionaire, who is facing criminal charges in Malaysia, Singapore, Switzerland and elsewhere, including the United States, will be hoping to retain some of the value of the assets.
Malaysia Kept On Sidelines?
Malaysian entities have expressed concern that the United States authorities may be tempted to negotiate with Jho Low’s new, high-powered legal team, in order to close a case that could otherwise carry on for years. Notably, the US recently refused to grant a Malaysian official request for a guarantee it would return all the money back from the assets seized.
“It doesn’t mean that the United States will not return the money to Malaysia, but it does mean the US is insisting on keeping control over the process and that might include settling the case for less than the entire amount”
one person who is well versed in the matter explained to Sarawak Report. It is further understood that the approach from Jho Low’s team has not yet been formally discussed with the Malaysian authorities, who may very well react with dismay at the prospect of any settlement of this nature.
Particularly galling to Malaysians is the likelihood that Low’s new and well-connected legal advisors are being generously paid by money that was itself stolen from 1MDB. US investigators have been reported as concluding that the origin of the cash received by Christie and one of President Donald Trump’s go-to law firms, Kasowitz Benson Torres, is indeed 1MDB.
Likewise, the money sent to pay the libel lawyers Schillings in the UK, which has been doing its best to disrupt the publising othe the book The Sarawak Report as well as the Wall Street Journal’s own book in Britain, is also thought to trace back to 1MDB.
Going For Goldman Sachs
The apparent willingness of US prosecutors to discuss such matters with Low’s new team and the news that they may indeed be tempted to reach a deal, may indicate that the DOJ sleuths are already focusing on other aspects of the case, informed observers have told Sarawak Report: namely the pursuit of the banking giant Goldman Sachs. Settling the civil action would free up prosecutors to pursue the Goldman bond issues on behalf of 1MDB, which netted the bank suspiciously obscene commissions of up to 11%.
The bank has earned the anger and ill-feeling of countless Americans as a result of its pivotal role in causing the crash of 2008 and yet none of its bankers have been brought to book so far. The apparent negligence and huge sums earned through 1MDB have provided US investigators their most compelling evidence yet against what many believe to be rogue behaviour by the major bank.
It was Sarawak Report that first exposed the huge commissions being earned by Goldman Sachs from 1MDB in 2013, by publishing the terms of two so-called power purchase bonds, which together with a later third offering netted commissions totalling just under $600 million for the bank. The market price for such services was a fraction of that amount.
The former South East Asia boss, Tim Leissner has already been picked up in the United States and is understood to be cooperating with the DOJ enquiries. A new case against the global bank is where 1MDB now seems headed as it gains even more international significance.
Having his say: A screengrap of www.jho-low.com website which contained the letter
Rogue businessman insists he is not guilty via letter on personal website
PETALING JAYA - Fugitive businessman Low Taek Jho has proclaimed his innocence over allegations related to 1Malaysia Development Bhd (1MDB) in a signed letter uploaded to his personal website.
Low, also known as Jho Low, admitted that in hindsight, he might have done things differently.
"But any mistakes I made do not amount to the sweepingly broad and destructive allegations being made against me.
"Let me be clear: I am innocent," Low wrote.
The website, www.jho-low.com, also contains legal documents related to the 1MDB case, news media articles on him and 1MDB as well as statements by Low’s lawyers.
A notice on the website said that jho-low.com was created on behalf of Low through his legal counsel to provide information to the public.
A search on the Internet archive shows that the website has been updated since 2015 but until recently only contained general information on Low.
According to the WHOIS database, jho-low.com was created on June 2, 2014.
Yesterday, the link to the website was shared extensively on social media, after the undated letter was posted.
“I only ask that everyone – courts, prosecutors, and the general public – keep an open mind until all of the evidence comes to light,” Low wrote in the letter.
The financier wrote that for the past several years, he had been subjected to a series of allegations around the globe in relation to the operations of 1MDB.
He said many of the allegations had originated from blog posts, “improper” leaks from governmental agencies around the world, or unproven allegations filed in court, where he had never been afforded an opportunity to set the record straight.
“I have been paraded in effigy through the streets of Kuala Lumpur, and photographs from my younger days plastered in tabloids across the globe.
“It has become clear that there is no platform where objective information can be presented regarding this issue – and no jurisdiction that hasn’t been poisoned by gossip, innuendo, and unproven allegations.
“This website is an effort to change that,” Low wrote.
The 36-year-old Penangite is described as a “global philanthropist, investor and entrepreneur” on the website.
A check with an official from a public affairs firm representing Low confirmed the veracity of the website.
Meanwhile, Swiss whistleblower Xavier Justo, in an immediate response, said: “The Jho Low website does not show any proof of his innocence.
“It is just a bunch of legal documents showing that he wants a few cases to be dismissed.
“It’s the way the justice system works, you can be as guilty as guilty is and ask for a case to be dismissed. It’s not proof of innocence,” he told The Star.
The former PetroSaudi International executive said he was appalled at Low’s attempts to defend himself through the website.
“Any decent person will face justice (in court) if he can prove that he is innocent,” he said.
He added that he was amazed at Low’s attempts to try to “stop the distribution of books, abuse the justice system and hire public relations officers to defend his reputation while also creating a website to tell fairy tales”.
Low’s current whereabouts are unknown; he has been speculated to be hiding in China or the Caribbean.
He and his father, Tan Sri Low Hock Peng, were charged in absentia in Malaysia last month over money allegedly stolen from 1MDB.
Last week, Low, through the London-based law firm Schillings, sought to ban the books, The Sarawak Report by Clare Rewcastle Brown and Billion Dollar Whale by The Wall Street Journal’s Tom Wright and Bradley Hope, from going on sale.
Former premier Najib Abdul Razak was arrested at his residence in Jalan Duta, Kuala Lumpur, this afternoon, according to MACC chief commissioner Mohd Shukri Abdull.
The arrest was carried out in relation to the commission's investigation into the SRC International issue.
Speculation is also rife that the former premier could be charged tomorrow.
Shukri Abdul told the media that the arrest took place at 3pm and the former premier has been taken to the commission's headquarters in Putrajaya for further questioning.
Previously, MACC had recorded Najib's statement twice with regard to the SRC International issue.
Last Friday, Malaysiakini had reported that there is a strong likelihood the former premier would be arrested this week.
Low Taek Jho and an official from 1MDB had hired Goldman Sachs Group to underwrite the US$1.75 billion bond offering.
SINGAPORE: In a private dining room at Singapore's Taste Paradise restaurant, over a meal of abalone and suckling pig, two Goldman Sachs Group Inc bankers were explaining a US$1.75 billion bond offering to six executives of a Swiss bank.
It was early 2012, and joining Goldman bankers Roger Ng and Tim Leissner that day were a young Malaysian financier named Low Taek Jho and an official from state investment fund 1Malaysia Development Bhd, known as 1MDB, which had hired the New York bank to underwrite the bond sale.
Now, people familiar with the matter say, investigators from Singapore to the United States are looking more closely at the roles of Mr Ng and Mr Leissner, who have both left Goldman. And they're asking what happened in that private
dining room named after the first emperor of a unified China, Qin Shi Huang.
In particular, they're examining how US$577 million in proceeds from a bond sale that May ended up a day later in an account at BSI SA in Switzerland - the same bank whose executives were at the Taste Paradise.
The lunch, previously unreported, brought together the key parties in
what has become the biggest financial scandal in Malaysia's history,
involving the alleged misappropriation of US$4.5 billion of 1MDB funds.
It was the culmination of numerous conversations as BSI bankers and
compliance officials sought clarity on the deal.
The BSI account belonged to a British Virgin Islands entity known as
Aabar Investments PJS Ltd., which US court documents say was used to
siphon off about US$1.4 billion from two 2012 bond sales, including the
offering discussed at the lunch.
The man who led BSI bank into the abyss
Mr Leissner, Goldman's former chairman of South-east Asia and lead
banker for three 1MDB bond sales, is now barred from the world of
finance in Singapore and the US.
Prosecutors in Malaysia and Singapore are turning their attention to
Mr Ng, Mr Leissner's junior, who introduced several parties central to
the scandal, the people said. Malaysian authorities are said to be
preparing a warrant for Mr Ng's arrest, people familiar with the matter
said earlier this month.
Mr Ng couldn't be reached for comment. A lawyer for Mr Leissner, Mr
Marc Harris, declined to comment, as did Mr Edward Naylor, a Hong
Kong-based spokesman for Goldman Sachs, and an official at EFG
International AG, which acquired BSI in 2016. A representative for Mr
Low did not reply to emails.
Recouping fees
The 1MDB investigation has quickened since Malaysian Prime Minister
Mahathir Mohamad returned to power in May. Tun Dr Mahathir has called
former premier Najib Razak, who set up the fund in 2009, a thief and
made resolving the case one of his priorities. Several arrest warrants -
including one for Mr Low, described by prosecutors as a key figure in
the plot - have already been issued.
Dr Mahathir said in a June 22 Bloomberg Television interview that
Malaysia is also seeking to recoup some of the almost US$600 million in
fees Goldman made from the three deals, which were arranged by the
bank's London-based unit.
"What we earned from the debt transactions reflected the risks we
assumed at the time, specifically movement in credit spreads tied to the
specific bonds, hedging costs and underlying market conditions," Mr
Naylor, the Goldman spokesman, said last week in response to Dr
Mahathir's comments.
Datuk Seri Najib has repeatedly denied wrongdoing and called the probe "political revenge."
Genteel banker
Mr Ng, a well-connected Malaysian banker, joined Goldman in 2005 from
Deutsche Bank AG, where he won mandates for several bond deals. He
provided an introduction to lawmakers in the state of Terengganu, which
in 2009 hired Goldman to advise it on the creation of the Terengganu
Investment Authority (TIA), the people said.
Mr Ng was promoted to managing director that year. At TIA, which
eventually became 1MDB, Mr Ng crossed paths with Mr Low, a Malaysian
dealmaker and adviser to the fund.
As Goldman won deals from 1MDB, Mr Ng and Mr Leissner forged a
friendship, which extended to their wives, according to the people.
Investigators are now also looking at a transfer shortly after the May
2012 bond sale of US$17.5 million to Mr Ng's wife, Malaysian lawyer Lim
Hwee Bin, from Mr Leissner's former wife Judy Chan, who runs a vineyard
in China, the people said. Ms Lim and Ms Chan did not reply to emails
and phone calls.
Mr Ng is described by those who know him as the antithesis of a Wall
Street investment banker - genteel, valuing personal ties and averse to
asking hard questions. He was content letting his boss champion the 1MDB
deals. Mr Leissner, who arrived late at the 2012 lunch and left early
to catch a flight, made most of the presentation, leaving Mr Ng and Mr
Low to fill in the gaps, according to the people familiar with the
meeting.
While Mr Ng played an important role facilitating the US$1.75 billion
bond deal, dubbed Project Magnolia, he wasn't involved in the two other
bonds Goldman underwrote for 1MDB, the people said. Mr Ng left the bank
in 2014, a few months before the missing 1MDB funds became public.
Now managing director for Asia at energy-drinks company Celsius
Holdings Inc, where Mr Leissner and his current wife Kimora Lee are both
investors, Mr Ng has been barred from travelling by the Malaysian
Anti-Corruption Commission, the people said.
He and his wife live in a gated community in Damansara Heights in
Kuala Lumpur, where houses sell for RM5 million (S$1.7 million) to RM25
million.
Mr Ng joined Boca Raton, Florida-based Celsius in 2016, the same year
Mr Leissner became co-chairman of the board. Mr Leissner resigned in
May 2017, though he remains one of Celsius' largest shareholders. Hong
Kong billionaire Li Ka Shing and Mr Russell Simmons, the former husband
of Mr Leissner's current wife, are also investors.
Ms Megan Bell, a spokesman for Celsius, declined to comment.
