CEO Lloyd Blankfein participated in two meetings with a Malaysian financier at the heart of one of the world's biggest…
CEO Lloyd Blankfein participated in two meetings with a Malaysian financier at the heart of one of the world’s biggest financial scandals, including after the Wall Street Bank’s monitoring department had raised several concerns over the financier’s background and said the bank would not do business with him.
The financier Jho Low was charged this month by the US Department of Justice and was charged with helping to steal billions of dollars from 1Malaysia Development Bhd, an investment fund he helped to run behind the scenes. The Ministry of Justice also claims that two Goldman Sachs banks participated in the systems while hiding their cooperation with Mr. Low from Goldman’s management in New York.
Meetings were held in 2009 and 201
3 for Mr. Blankfein to meet Najib Razak, Malaysia when the Prime Minister included discussions about 1MDB, according to people familiar with the meetings.
With the accusation of two former older Goldman Sachs banks, US prosecutors accused of paying bribes, stealing and washing money from a Malaysian government bond fund, Street Wall Street finds itself at the heart of one of the world’s largest ever financial scandals. Photo: Reuters
A Goldman spokesman said that Mr. Blankfein met many people in his twelve-year position at the top of the bank and could not have known that Malaysian leaders would bring Mr. Low to any meeting. Mr. Blankfein has no memory of meeting Mr Low, he said. There is no indication Mr. Blankfein was aware of the bank’s compliance concerns about Mr. Low at the time.
Last week in a public forum about the developing scandal Mr. Blankfein the debt of rogue workers. “These are guys who have avoided our protection and lie,” he said.
The Justice Department continues to investigate Goldman’s role in the 1MDB scandal, including which banks were aware of Goldman’s interactions with Mr. Low and how the bank handled questions when it learns about the alleged fraud. The bank also investigates, searches hundreds of thousands of pages of emails, calendars and travel documents for employees participating in the agreements.
Goldman helped 1MDB raise more than $ 6.5 billion through three bond issues in 2012 and 2013 and in the process made about $ 600 million in profit. Over half of the sum occurred spelled by Mr. Low and others in a system Mr. Low masterminded, according to the Ministry of Justice accusation. The bank has said that it could not have known what would happen to the money it contributed to raising.
Mr. Low, as the Malaysian government believes in China, has denied mistakes.
Tim Leissner, Goldman’s former president of Southeast Asia, pleaded guilty in August to conspire to wash money and violate foreign anti-discrimination laws to help billions of dollars from the bond agreement, according to applications announced last week. Former Goldman CEO Roger Ng was accused of three degrees of conspiracy to violate foreign anti-discrimination laws and wash money, filing show.
A lawyer for Leissner refused to comment on the allegation. Mr. Ng, arrested in Malaysia, could not be reached.
The prosecution also considered an “Italian citizen” at Goldman as a counterparty alleged to help keep Mr. Lows commitment to 1MDB hidden from the bank’s management in New York. People familiar with the question say that the person is Andrea Vella, a Hong Kong-based partner who helped to structure the 1MDB bonds and increased to being co-director of investment banking in Asia.
Goldman puts Mr Vella in leave after the allegation was unsettled last week. He had been removed by his management two weeks earlier in a management shakeup. Mr. Vella, who has not been subject to any offenses, did not respond to a request for comments.
In 2015, after the news of 1MDB broke into international media, Goldman moved to reduce the size of its Singapore office, through which much of the 1MDB bond business had been pushed.
One of the leaders on a list of people who would be abandoned at that time, a Swiss citizen named Cyrus Shey who had worked closely with Vella on 1MDB bonds, was unfortunate to be fired, according to a person familiar with the matter .
Stuart Ramson / Associated Press
Mr. Vella told colleagues at Goldman that he was concerned Mr Shey could publicly report 1 MBB data at a review of the business and he interceded to ensure that Mr. Shey was not immediately released, according to the person. Mr. Shey later received a $ 1.5 million private loan from Leissner, then Goldman’s president in Southeast Asia, said the person. Mr Leissner left the bank in early 2016.
Mr. Shey did not answer questions. His lawyer said that Mr Shey never planned to discuss 1MDB publicly; The lawyer did not answer questions about the private loan from Leissner.
Mr. Leissner and his lawyer did not respond to the request for comments on this article.
The Justice Department accuses Mr Leissner and Ng of trying to cover up their activities by repeatedly assuring the Goldman bosses Mr. Low was not involved in their work with 1MDB, although Mr. Low stood up at meetings.
The first meeting attended by Mr. Blankfein in November 2009, in New York’s four-season hotel, was set up by Mr Leissner and Ng for Goldman to run is about 1MDB according to a statement released last week, from an FBI agent who participated in the investigations.
Two months earlier, Leissner had tried to get Mr. Make an account with Goldman’s Private Bank in Switzerland, but was suspended due to compliance concerns about the source of Mr. Lows wealth, says affidavit. Mr. Blankfine’s presence together with Mr Low and then Prime Minister Najib at the 2009 meeting was reported first by Bloomberg.
In the following years, as Goldman helped 1MDB to raise money, Mr. Lows roll in the fund a constant source of concern for the bank’s New York-based compliance committees and lawyers, says affidavit. Two former Goldman bosses based in Asia said that Mr. Lows role in the fund was widely spoken at the office.
Attorneys and members of the Goldman committees who know to act constantly asked Leissner by email and at meetings about Mr. Low were involved. On several occasions, Leissner denied that Mr. Low did not matter, according to the explanation.
In March 2013, Goldman sold the last of three bonds for 1MDB. On March 10, just over a week before the release of $ 3 billion, a meeting in a New York-based committee that determines which deals and clients Goldman should ask Mr Leissner about Quizzes about Mr. Lows role as intermediary at 1MDB, affidavit says.
Following the agreement, a member sent e-mail to Leissner at the end of April with further concern over Mr. Lows roll, the announcement announces. Mr. Leissner denied Mr. Low had some commitment, according to the explanation.
Just a few months later, in September 2013, Mr. Blankfein Mr. Low for a second time. Mr Leissner arranged for Najib, Malaysia’s then prime minister, to sit down with some 20 high-quality Goldman clients at New York’s Mandarin Oriental Hotel. Mr. Low participated with Najib, say people who are familiar with the question.
At the end of 2014, Mr. Blankfein Messrs. Leissner and Vella for their efforts to arrange business with Malaysia.
“Watch what Tim and Andrea did in Malaysia,” he told a meeting in New York on how to build business in emerging markets. “We have to do more of it.”