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Malaysia shows Goldman's heat for 1MDB refund

SINGAPORE – The Malaysian government increased Tuesday's pressure on Goldman Sachs to pay back $ 600 million in fees as…

SINGAPORE – The Malaysian government increased Tuesday’s pressure on Goldman Sachs to pay back $ 600 million in fees as it received from arranging three state-funded bonds 1Malaysia Development Bhd in 2012 and 2013 when the investment bank is under strong scrutiny in the United States [19659002] The review is due to the former Goldman employee’s role in arranging the three agreements that raised a total of $ 6.5 billion for scandalized 1MDB.

Malaysian Prime Minister Mahathir Mohamad said that Goldman “fooled” Malaysia over handling state funds in an interview with CNBC broadcast on Tuesday. “There is evidence that Goldman Sachs has done wrong things,” he says, “apparently we have been tricked by the Goldman Sachs people’s agreement.”

Mahathir also said that US prosecutors had promised to help return to 1

MDB-related money washed which includes Goldman. “It takes some time but they [Department of Justice] have promised to give back the money,” he told reporters in Singapore.

First Minister in anticipation of Anwar Ibrahim went one step further to say that the country would act a more “aggressive” way of seeking damage from Goldman. “Now, the United States [Justice Department] has begun prosecution, but Malaysia should act in a more aggressive way to claim damages over our injured image,” he said in a parliamentary debate Tuesday. “I think the government needs to take this step to seek far beyond the commission of $ 600 million.”

Goldman shares tripped 7.5% on Monday in New York until the end of $ 206.05, the lowest closing since November 2016.

Sales began after Malaysian finance minister Lim Guan Eng said: “We should seek full refund to Goldman Sachs. ” Lim told a Malaysian radio station BFM on Monday that in addition to charges, Kuala Lumpur will also try to recover other “consequential losses”, including the higher return for Goldman signed $ 1 billion for 1MDB.

© Reuters

The US Department of Justice in early November accused former Goldman partner Tim Leissner and former banker Roger Ng of three criminal bills, including bribery of overseas officials.

According to the accusation, the two also co-operated with Malaysian finance minister Jho Låg, who was simultaneously accused of washing billions of dollars embarrassed from 1MDB and paid bribes to various Malaysian and Abu Dhabi officials. Lows residence is unclear.

According to the Ministry of Justice, payments to senior officials were aimed at gaining business, such as bond guarantees. In addition to the alleged bribes, the fund is accused of deriving cash to buy real estate in New York and artwork. More than $ 2.7 billion was dismissed from 1MDB, the Ministry of Justice said.

Goldman CEO David Solomon said he felt “horrible” about former employees involvement in the 1MDB scandal. “Obviously, it is very worrying to see that two former Goldman Sachs employees went so blatantly about our policies and so blatantly broke the law,” he told Bloomberg Television on November 7.

Minister Lim said that Solomon’s statement was “indirectly acknowledging something very wrong.”

Furthermore, The Wall Street Journal reported that former former Goldman Sach CEO Lloyd Blankfein met Low below 2009 and 2013. The report said the meetings were held to collect former Malaysian Prime Minister Najib Razak and Blankfein together. One of the meetings was made after Goldman’s agreement had expressed concern over Low’s background and recommended that the bank avoided business relations with him.

The Justice Department officials said other Goldman Sach employees in addition to the two accused bankers knew about the alleged bribery but did not reveal their name. The department is expected to continue its investigation as to whether and to what extent Goldman as a company was aware that the transactions were illegal.

Since the global financial crisis in 2008, the business models of large US financial institutions have been raised. If the former bankers proved to be involved in bribery and fraud, Goldman will pull more fire from his critics. Although the bank has not been shown to be involved, it must take steps to prevent similar actions by its employees in the future.

1MDB is seen by many in Malaysia and elsewhere as a vehicle for corruption by the former Najib government. The fund was founded in 2009 and supervised by Najib. It invested in development projects in the capital, but claims have shown that more than 4.5 billion dollars were directed from the fund to private hands, including Najib.

After being employed in May, Mahathir has made an unprecedented corruption of the former government a top priority. Malaysian officials have arrested and accused Najib and his wife, Rosmah Mansor, with money laundering and other crimes.

By the end of 2016, the Singapore Monetary Authority issued a ten-year ban on Leissner’s participation in securities trading in the country. 19659002] The authorities in Malaysia, the United States and Singapore jointly investigate this case.

Nikkei’s staff writers Takashi Nakano and Ryo Nakamura contributed to this story.

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