US subpoenas ex-Goldman banker over 1MDB case

MAS says in response to queries that Tim Leissner was not based in S'pore during alleged deals

SINGAPORE • A former banker with Goldman Sachs Group has become entangled in a sprawling investigation of the Malaysian state investment fund as the authorities in the United States turn to him for information.

Mr Tim Leissner was recently chairman of the group's South-east Asia operations but was not based in Singapore during the time of his alleged involvement in 1Malaysia Development Berhad (1MDB), the fund being probed for embezzlement of millions of dollars.

A spokesman for the Monetary Authority of Singapore (MAS) said in response to queries that Mr Leissner was based in Singapore from 2002 to 2011, and moved to Hong Kong in November 2011.

"He was not based in Singapore when his alleged involvement in the 1MDB deals took place," the MAS spokesman said in a statement.

"Goldman Sachs issued a memo in July 2014 announcing that Tim Leissner was appointed as Goldman Sachs' chairman of South-east Asia and would be relocating back to Singapore. However, our records show that he did not relocate to Singapore and Goldman Sachs has confirmed that the relocation did not materialise," the spokesman added.

From Malaysia to Switzerland to the US, investigators have been trying to trace whether money might have flowed out of the 1MDB fund and illegally into personal accounts.

Mr Leissner was issued a subpoena about the Malaysia matter late last month, just days after Goldman Sachs confirmed he had left the firm. The Federal Bureau of Investigation's New York office is leading the investigation and is trying to determine if any US laws were broken, Bloomberg reported, quoting sources briefed on the subpoena.

It is still unclear what information Mr Leissner might be able to provide, Bloomberg said.

Mr Leissner championed a series of bond sales that raised US$6.5 billion (S$9 billion) for 1MDB and were notable for the above average fees generated for Goldman.

Since Prime Minister Najib Razak started the fund seven years ago, its debt levels have swelled amid claims of financial irregularities.

The fund, whose advisory board is chaired by Datuk Seri Najib, said in February 2015 that it would wind down its assets. The prime minister has said accusations of misappropriations are politically motivated and has denied any wrongdoing.

Goldman Sachs is working with an outside law firm to conduct an internal examination and is reviewing its own role in helping 1MDB raise capital.

The Swiss authorities froze accounts holding tens of millions of dollars last year as part of a criminal investigation into 1MDB funds embezzlement. MAS said last month that it froze a large number of accounts linked to possible money laundering of 1MDB funds.

A spokesman for MAS said yesterday: "Singapore has been co-operating actively with several jurisdictions... We have responded to all foreign requests for information and have requested information from relevant counterparts to aid in our investigations."

A version of this article appeared in the print edition of The Straits Times on March 09, 2016, with the headline 'US subpoenas ex-Goldman banker over 1MDB case'. Print Edition | Subscribe