1MDB scandal: Goldman Sachs apology not enough, says Malaysia's Finance Minister Lim Guan Eng

Finance Minister Lim Guan Eng.
Finance Minister Lim Guan Eng.

Malaysia may drop charges over bank's role in scandal if it pays $10.2b: Finance Minister

KUALA LUMPUR • An apology from Goldman Sachs Group does not cut it for Malaysia, which said it may consider a discussion to absolve the bank of blame for its role in the 1MDB scandal for US$7.5 billion (S$10.2 billion).

The country filed criminal charges against the lender last month, the first for Goldman, and may discuss dropping those allegations if the bank pays the sum, Finance Minister Lim Guan Eng told reporters yesterday.

Units of the bank were accused of making false statements in documents submitted to a local regulator in arranging US$6.5 billion bond offers for troubled state fund 1MDB.

"Goldman Sachs should understand the agony and the trauma suffered by the Malaysian people as a result of the 1MDB scandal," Mr Lim said in the administrative capital of Putrajaya.

"An apology is just not sufficient. Not enough. There must be the necessary reparations and compensation," he added.

Goldman's chief executive David Solomon this week apologised to the Malaysian people for the role that senior banker Tim Leissner played in the 1MDB scandal. The country was "defrauded by many individuals", with Leissner being "one of those people", Mr Solomon said during a conference call with analysts, after the investment bank reported its earnings on Wednesday.

Leissner has pleaded guilty to charges including conspiring to launder money, while another former Goldman banker Roger Ng remains in custody in Malaysia as he faces extradition to the United States to face related allegations.


Mr Solomon reiterated that the firm conducted considerable due diligence on the deals and was lied to by Leissner.

Appearing on his first earnings call since becoming CEO in October, Mr Solomon said the firm is cooperating with the US Justice Department and the investigation is still open.

Goldman has said it will vigorously defend itself against the charges by Malaysia.

The allegations against Goldman were filed by Attorney-General Tommy Thomas as Malaysia's top prosecutor, while the Finance Minister is not formally authorised to make decisions on criminal charges.

"At least he accepted that they have to bear and shoulder some responsibility," Mr Lim said, referring to Mr Solomon.

"If not for the change of government, do you think Goldman Sachs would have apologised? We are talking about the largest investment bank in the world... It's not easy to get an apology from them," Mr Lim said.

"An apology with US$7.5 billion, that is what matters."


A version of this article appeared in the print edition of The Straits Times on January 19, 2019, with the headline 'Goldman apology not enough, says KL '. Print Edition | Subscribe