Over 30 Goldman Sachs execs top bosses reviewed 1MDB deals – Nation

PETALING JAYA: Over 30 Goldman Sachs executives including bank boss David Solomon and his predecessor, Lloyd Blankfein reviewed the 1Malaysia Development Berhad (1MDB) deals, based on sources familiar with the approval process.

The Financial Times reported on the Wall Street helped 1MDB sovereign wealth fund sells about RM27.06 bil (US $ 6.5bil) of bonds between 2012 and 2013, two years before Malaysian police raided 1MDB's offices to investigate allegations of massive fraud.

In a 2016 indictment, the US Department of Justice, which is much less expensive than ever before, has been siphoned off by Low Taek Jho.

The report added that DoJ, which is still exploring what sanctions should Goldman bankers Tim Leissner and Roger Ng in connection with the deal.

Leissner had pleaded guilty to two counts of conspiring to commit money. Ng was reported to be arrested in Malaysia on similar charges.

FT reported that Goldman declined to comment that it is reviewing DoJ's filings and co-operating with the investigation.

In a filing to the Securities and Exchange Commission on Friday (Nov. 2), the Wall Street firm estimated that it could be said to be in a total of $ 1.8 billion (RM7.49 bil) above its total reserves for such matters. Previously, Goldman estimated litigation losses to be in excess of $ 1.5bil (RM6.24 bil).

Company insiders were quoted saying the deal had been extensively scrutinized, since it also involved Abu Dhabi's Malaysian sovereign wealth fund, which was teed up to buy some of the bonds.

There were two sovereign wealth funds. . . Everyone had a look at this, "said one banker who reviewed the deal. "You're not going to find that what happened. . . (was) because there was an appropriate level of oversight. "

The source told FT that "everybody" included Blankfein and Solomon, who was head of Goldman's investment banking division from 2006 to 2012, and Gary Cohn, then chief operating officer of the bank.

FT noted that a second person with knowledge of the process of approval.

"There was no question that the money was going to be stolen," he said. "The concern was that this is a new sovereign wealth fund, have the issues been 'do they understand (the fundraising)?'"

Goldman received nearly RM2.487 bil (US $ 600mil) in fees from the deals. Rival bankers have said that the hefty fees the fund is willing to pay for the fundraising should have raised red flags.

FT reported that a senior official at Malaysia's finance ministry this week said Goldman charged between 9 to 11 per cent of raised funds.

The business daily reported that the second person with the knowledge of the deal said Goldman offered 1MDB a menu of fee structures If the bond had fallen, Goldman would have lost money.

The US bank has already taken a hit to its business in Singapore and Malaysia because of the scandal; Asian markets, including China and Japan, are not concerned, one Hong Kong-based Goldman Sachs source said.

During Friday trading in New York, the bank's shares are broken down.

"I do not think it will be a very big deal for Goldman Sachs investors," said Jeff Harte, an analyst at Sandler O'Neill was quoted by FT.

"(It) looks like a few employees dodged Goldman Sachs' internal systems to secure business from 1MDB. Clearly not a positive, but not terrible or widespread. "