Putrajaya turned down Goldman’s ‘less than US$2b’ compensation offer, says Dr M

Prime Minister Dr Mahathir Mohamad has reiterated Putrajaya’s demand for US$7.5 billion (approximately RM31.34 billion) from Goldman Sachs to compensate for the 1MDB scandal, while hinting at possible flexibility in negotiations if the US investment bank "responded reasonably". 

“Goldman Sachs has offered something like less than US$2 billion [...]

“We are not satisfied with that amount so we are still talking to them [...] If they respond reasonably we might not insist on getting that US$7.5 billion,” he was quoted as saying in an interview with the Financial Times.

Among the things Putrajaya wants compensation for is Goldman’s role as the underwriter and arranger of three bond sales that raised US$6.5 billion (approximately RM27.16 billion) for 1MDB.

It also accused the bank of receiving US$600 million (approximately RM2.5 billion) in inflated fees for the transactions.

US prosecutors have since charged two former Goldman bankers - former Southeast Asia branch partner Tim Leissner and staff Roger Ng - for stealing from 1MDB. Leissner pleaded guilty to conspiracy to launder money and violate the US’ Foreign Corrupt Practices Act.

During the interview, Mahathir said the government had reached out to other banks like UBS and Deutsche Bank over their involvement in the 1MDB scandal.

The prime minister also revealed that Putrajaya is attempting to recoup US$1 billion (approximately RM4.17 billion) from a recent settlement between fugitive financier Low Taek Jho and the US Department of Justice (DOJ).

“The amount (Low embezzled from 1MDB) is much bigger,” Mahathir was quoted as saying.

“If he had the full amount we would be very happy [...] We are still going after the rest of the money. The DOJ has indicated that, if we can prove claim of ownership, then we will be able to get the money for ourselves,” he added.

Mahathir said the government was not presently in contact or negotiation with the businessperson, whose whereabouts are unknown.

Earlier this week, Low and his family agreed to surrender their claims over a wide range of 1MDB-linked assets to “forever resolve” all the DOJ’s civil forfeiture suits against them.

The businessperson stressed that the deal with the DOJ did not amount to an admission of wrongdoing.

The DOJ had submitted a court filing on Oct 30, seeking consent judgment on the stipulated settlement.

In the court filing, it was stated that the settlement only covers all matters pertaining to 1MDB-linked assets and does not constitute a waiver or release of the Lows from criminal claims made by the US government.

Low faces several criminal charges related to the 1MDB scandal and for allegedly conspiring to steer illegal foreign campaign funds into the US 2012 presidential election.

US rep: Low not off the hook

This was repeated by a US government official, who clarified that the settlement between DOJ and Low did not mean the latter was absolved from prosecution.

The Star reported US Assistant Secretary for East Asian and Pacific Affairs David R Stilwell as saying that Low remained a wanted man.

Investigations into Jho Low, as he is commonly called, were ongoing in the US.

“We are still pursuing justice. Criminal action is still on,” he was quoted as saying yesterday.

Stilwell also indicated that the US would return any 1MDB-linked money it seized to Malaysia.

“We are happy to return the money to where it belongs, ” he told the daily.

Similarly, Attorney-General Tommy Thomas said that Low’s settlement will not impede the criminal charges he faced in Malaysia.

“As far as Malaysia is concerned, all our own charges against him will continue, and he should return home to face them instead of hiding and making all sorts of claims that he will not get a fair trial,” he was quoted as saying in The Edge.

Thomas stressed that Low would be guaranteed a fair trial.

Low’s lawyers now claim that he has received political asylum from an unnamed country and has been roaming free in the Middle East in countries like the United Arab Emirates.

Inspector-General of Police Abdul Hamid Bador, however, dismissed such claims because he said the police knew where he was and was working on bringing him back to face charges.