Malaysia Calls for Goldman to Pay Billions -- WSJ

By Yantoultra Ngui 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (January 19, 2019).

PUTRAJAYA, Malaysia -- Malaysia's finance minister waved off an apology from Goldman Sachs Chief Executive David Solomon for the role of one its then-bankers in the scandal surrounding state investment fund 1Malaysia Development Bhd., saying it wasn't enough.

Lim Guan Eng said Friday that the only apology that would matter is one that comes with full reimbursement and reparations for the $6.5 billion the 1MDB fund raised with the investment bank's help. Prosecutors say much of the money was later siphoned off, with several hundred million dollars going to the personal accounts of then-leader Najib Razak.

The former prime minister has pleaded not guilty to multiple charges of money laundering and other offenses.

"Only when you pay reparation and compensation, then that will be sufficient," Mr. Lim told reporters, saying an appropriate figure would be $7.5 billion.

He added that Malaysia would consider dropping charges it filed against Goldman Sachs if it was compensated for the full amount raised.

"As we have stated previously, Goldman Sachs was lied to by certain members of the former Malaysian government and 1MDB," a spokesman for the investment bank said. "We intend to vigorously contest the charges brought against us."

Goldman Sachs has been dragged into the scandal at 1MDB because of its role as underwriter and arranger for three bond sales that raised $6.5 billion for the fund. Much of the total has gone missing, sparking a multinational investigation from Switzerland to the U.S. It also contributed to the defeat of Mr. Najib's government in elections in May.

U.S. prosecutors charged two former Goldman bankers in November in relation to the theft of billions of dollars from 1MDB.

Tim Leissner, Goldman's former chairman for Southeast Asia, pleaded guilty to conspiring to launder money and violating antibribery laws for his role in the affair. The other former Goldman banker, Roger Ng, was arrested in Malaysia in November at the request of U.S. authorities.

He is in custody facing extradition to the U.S. to face criminal charges relating to the scandal and couldn't be reached for comment. His lawyer couldn't immediately be reached for comment.

Malaysia also filed criminal charges against Goldman Sachs last month for its role in arranging the bond issues.

Mr. Solomon, the chief executive, apologized to the Malaysian people for Mr. Leissner's involvement in the scandal during a conference call Wednesday to discuss the bank's fourth-quarter results.

"At least he accepted that they have to bear and shoulder some responsibility," Mr. Lim said. "But that apology is insufficient."

Write to Yantoultra Ngui at [e-mail]

(END) Dow Jones Newswires

January 19, 2019 02:47 ET (07:47 GMT)

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