In a recent interview with news outfit CNN, Malaysia’s Finance Minister Lim Guan Eng expressed his hopes that the country can be a “normal, boring democracy” under ruling coalition Pakatan Harapan (PH), moving on from the 1MDB scandal. He contrasted this to the country’s state under the former Barisan Nasional (BN) administration, when Malaysia became known as a “global kleptocracy”.
Talking to CNN about the 1Malaysia Development Berhad (1MDB) scandal that rocked Malaysia and brought down BN, which had been in power for decades, Lim said he believes that US$7.5 billion (S$7.2 billion), the amount the country is asking Goldman Sachs to pay Malaysia, is a “reasonable” one.
Goldman Sachs, he alleges, was the investment bank who acted as a financial adviser for the beleaguered 1MDB, not just several “rogue” employees.
Lim said, “I want to be a normal, boring democracy where there are no financial scandals. No more 1MDB. No more Jho Low. And of course, no more former PM.”
CNN interviewer Kristie Lu Stout asked Lim if he thought Low, the fugitive Malaysian businessman at the heart of the 1MDB scandal, is in Guangzhou, China. Lim answered, “I think that information is at the moment speculative”.
Low Taek Jho is wanted in Malaysia for allegedly laundering billions of dollars from 1MDB, which had been established by Malaysia’s former Prime Minister, Najib Razak.
Lim pointed out Najib’s folly in allowing Low, who had just graduated from university, to have free rein in spending public funds. The Finance Minister has been vocal about PH’s aim to pursue its debtors, which includes Goldman Sachs.
The Malaysian government says that the US-based bank owes it over US$600 million (S$813 million) in fees that it paid for facilitating several bonds from 2012 to 2013.
In December, Malaysia filed criminal charges against three Goldman subsidiaries — Goldman Sachs International (UK), Goldman Sachs (Singapore) Pte, and Goldman Sachs (Asia) LLC in the United States.
According to Lim, Goldman Sachs was overpaid 100 basis points over the market rate for services it never gave. This, he asserts, is an undeniable breach of Goldman Sachs’ fiduciary duties.
Malaysia is determined to hold the bank accountable for its actions, and does not want it to get away with simply blaming a few ‘rogue individuals.’
He said, “How can you disclaim responsibility when you collected such a huge amount of fees, and at the same time you were, of course, broadcasting the fact that you were representing Malaysia.
I don’t think they can run away so easily.”
Lim pointed out that the bank’s the top executive in charge of 1MDB, Tim Leissner, who had complete access to Lloyd Blankfein, Goldman Sachs CEO at that time, pleaded guilty at trial in the United States. This would make it difficult for the bank to say they were unaware of what was going on.
Lim says that the PH government is bound and determined to repair its reputation after the 1MDB scandal so that citizens can “hold their heads up high again.”