Malaysia will not compromise in 1MDB talks with Goldman: Anwar

Mr Anwar Ibrahim said in an interview with Bloomberg on Feb 13, 2019, that Goldman Sachs Group must bear responsibility over the 1MDB scandal. PHOTO: BLOOMBERG

NEW YORK (BLOOMBERG) - Anwar Ibrahim, head of the largest party in Malaysia's ruling coalition, said the nation "will not compromise" in its talks with Goldman Sachs Group over the 1Malaysia Development Berhad (1MDB) scandal, and the bank "must bear responsibility".

The nation has a responsibility to uncover any crimes the investment bank may have committed, Datuk Seri Anwar said on Wednesday (Feb 13) in an interview with Bloomberg Television.

He said he is not sure whether Malaysia can get the US$7.5 billion (S$10.2 billion) it is seeking from Goldman as compensation for the scandal, and that it is "not feasible" that top officials at Goldman Sachs were unaware of the situation as the deal was underway.

Malaysia filed criminal charges against the bank in December.

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 1MDB.

Goldman officials have said the bank raised money for 1MDB without knowing it would be diverted, and that it is cooperating with the authorities.

However, Mr Anwar said that "it's not feasible or tenable to assume that the higher, top personalities in Goldman Sachs" were not aware.

He said the country now has sufficient safeguards over the banking sector but cautioned against complacency. "However rigid the safeguards, if you have crooks running the system, they can always navigate," he said.

Finance Minister Lim Guan Eng told reporters in January that Malaysia may consider a discussion to drop the charges should Goldman Sachs pay the sum.

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

Goldman's top executives have millions at risk from the 1MDB scandal.

Equity awards to chief executive David Solomon and his predecessor Lloyd Blankfein are subject to clawbacks if the results of the 1MDB proceedings "would have impacted" the board's pay decisions for senior executives.

Goldman also said it would defer payouts of long-term cash awards granted in January 2011 to three executives, who have since retired, until more information is available regarding 1MDB.

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

"The 1MDB bond offerings were designed to raise money to benefit Malaysia, and 100 per cent of the net proceeds from the transactions were deposited into 1MDB accounts," Goldman Sachs spokesman Jake Siewert said in an e-mailed statement.

"Not a cent of those funds ever passed through any account controlled by Goldman Sachs, and none of the funds were moved or redirected under our authority.

"Instead, a huge portion of those funds were stolen for the benefit of members of the Malaysian government and their associates, and it is abundantly clear that members of that government and 1MDB lied to Goldman about the use of proceeds from these transactions."

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