Malaysian Prime Minister Anwar Ibrahim appointed a vocal critic of Goldman Sachs Group Inc. to chair a task force formed to resolve matters linked to the multi-billion dollar 1Malaysia Development Bhd. scandal.
(Bloomberg) — Malaysian Prime Minister Anwar Ibrahim appointed a vocal critic of Goldman Sachs Group Inc. to chair a task force formed to resolve matters linked to the multi-billion dollar 1Malaysia Development Bhd. scandal.
Anwar told parliament late Thursday that he agreed with criticism Johari Abdul Ghani had raised on Malaysia’s settlement deal with Goldman Sachs on 1MDB. Johari said last week the government should review its deal with Goldman Sachs for its role in the scandal, as the final sum was too low.
“I myself disagree with the past decisions, which were too light when the understanding was made,” said Anwar, speaking at the tail end of the policy stage of the 2023 budget debate. “Goldman Sachs profited off our hardship and pain.”
Goldman Sachs and Anwar’s government are currently in dispute over how much the US bank owes Malaysia for its role in raising $6.5 billion in 2012 and 2013 for 1MDB. The bonds were earmarked for redevelopment but all except $2 billion of the money was diverted to pay bribes to government officials, US federal prosecutors said.
The settlement announced by the previous government in July 2020 called for Goldman Sachs to pay $2.5 billion while guaranteeing the return of $1.4 billion of 1MDB assets seized by authorities around the world, in exchange for Malaysia dropping charges against the bank.
Johari last week said the $2.5 billion figure agreed upon was too little, and Goldman Sachs should be made to pay the $1.4 billion sum outright. He told parliament the bank was including in its accounting of 1MDB assets settlement payments recovered from other institutions that had been involved in the case, such as AmBank, Deloitte PLT and KPMG.
“Why should we sacrifice money that we can get from the number one investment bank in the world?” Johari said on Feb. 27, to thumps of approval from fellow lawmakers. “How can we allow Goldman Sachs just to run away like that when Goldman Sachs’ senior management was involved?”
Johari was the second finance minister during jailed former premier Najib Razak’s administration at the height of the 1MDB scandal. He lost his parliamentary seat in 2018 but won it back in November’s general election, and has since raised the Goldman Sachs issue in parliament and in interviews with local media.
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