Goldman Sachs: 1MDB proceeds never went through our accounts


Goldman Sachs Group Inc has denied that any money from 1Malaysia Development Bhd’s (1MDB) funds had passed through any accounts controlled by the bank.

In an email reply to The Malaysian Reserve, a Goldman Sachs spokes-person said the bank had deposited 100% of the net proceeds from three bond transactions into 1MDB’s bank accounts.

“Not a cent of those funds has ever passed through any accounts controlled by Goldman Sachs, nor have any of those funds been subsequently moved or redirected under our authority,” the spokesperson said.

The three bond deals — namely Project Magnolia, Project Maximus and Project Catalyse — took place in May 2012, October 2012 and March 2013 respectively, with a total offer size of US$6.5 billion (RM26.86 billion).

The spokesperson added that the record further showed significant power assets were legitimately purchased with part of the proceeds raised from the offerings.

“Evidence presented by the US Department of Justice and others allege that other funds from the proceeds were stolen by members of the previous Malaysian government and those close to them,” the spokesperson said.

Former Prime Minister Datuk Seri Mohd Najib Razak had said the global investment bank must take responsibility over its “dereliction of duty” as it was appointed and paid by 1MDB to care for the sovereign fund’s interest.

Najib also insisted that he had put in place “a system” to take care of Malaysia’s interest.

Subsequently, Finance Minister Lim Guan Eng said Najib is in a complete state of denial by refusing to admit that he caused huge losses to the country due to 1MDB, while emphasising that the US investment  bank must pay back US$7.5 billion to Malaysia.

Lim also said that the New York-based bank must be held accountable and shoulder the blame by paying compensation over the financial scandal, not just by apologising.

Last week, Goldman Sachs CEO David Solomon apologised to the Malaysian people for the role that former senior banker Tim Leissner played in the 1MDB scandal.

Malaysia had filed criminal charges against the bank and two former employees for alleged theft. Of the total US$6.5 billion, an estimated US$2.7 billion (RM11.16 billion) have ended up in the accounts of people close to or associated with the bank.

The government alleged that the US bank had misled investors in the three bond sales it arranged for 1MDB and knew the money would be misused. It also claimed that US$600 million (RM2.48 billion) were pocketed by the bank as bond arrangement fee.

Leissner pleaded guilty to charges including conspiring to launder money and agreed to pay US$43.7 million (RM180.59 million) in restitution.

On Dec 19 last year, another former Goldman Sachs banker, Roger Ng Chong Hwa, pleaded not guilty in the Kuala Lumpur Sessions Court to four counts of abetting Goldman Sachs over the sale of the 1MDB bonds by leaving out material facts and making false statements.

Yesterday, Ng filed an appeal at the High Court against an earlier decision by the Sessions Court to reject his bail application, as well as seeking permission to have adequate access to his US attorney.

The man is facing 1MDB-related charges in the US and Malaysia.

Ng was arrested by the police on Nov 1 and later remanded for 60 days pending the extradition request by the US authorities.