Goldman Sachs(GS) must be celebrating now following news report that the US Department of Justice is seeking to recover US$300 million (RM1.2 billion) in additional assets allegedly associated 1MDB scandal. These assets were traced to an escrow account in the United Kingdom.
This latest action brings the total value of assets the United States Justice Department has sought to recover in relation to the scandal to US$2.1 billion – and confirms that GS need to pay only USD 2.5 billion, and not USD 3.9 billion to the Malaysian government. So far the United States has recovered or assisted Malaysia in recovering nearly US$1.1 billion in assets.
GS has cleverly secured a good deal at the Malaysian government expense, to resolve GS criminal involvement to defraud 1MDB together with Malaysian leaders and their cronies. In exchange, criminal charges against 17 of GS current and former directors were dropped by the Malaysian authorities.
GS will finally pay USD 2.5 billion to the Malaysian government and not USD3.9 billion, because USD1.4 billion guarantees was from assets related to 1MDB seized by governmental authorities around the world. The fact that the US alone has sought to recover USD 2.1 billion in 1MDB assets and has recovered or assisted Malaysia in recovering nearly USD 1.1 billion, clearly exceeds the USD1.4 billion guarantee given by GS.
Even GS has publicly asserted that its USD1.4 billion guarantee that Malaysia would receive from assets related to 1MDB seized by government authorities throughout the world, will not likely cause GS to make any significant payments. GS exposure is likely limited to the USD2.5 billion cash payment committed by GS.
The present Federal government was clearly duped by GS when it should have stuck to the PH government’s demand for a full restitution of at least USD7.5 billion. By settling for only USD 2.5 billion or a third of the original claim of USD7.5 billion, the Finance Ministry have sold the people short.
The US Justice Department said it was also seeking from Riza Aziz, a Hollywood producer and Najib Razak’s stepson, more than US$4 million in funds traceable to assets embezzled from 1MDB. The Malaysian authorities had controversially dropped charges against Riza after he agreed to help recover only a portion of the monies stolen. This serves to reinforce PN government’s complete lack of public accountability and transparency on a matter of public interest and importance.
LIM GUAN ENG
Secretary General of DAP