Dr M says Goldman Sachs’ 1MDB offer ‘too low’, will go to court if negotiations fail

Debra Chong
Malaysian Prime Minister Tun Dr Mahathir Mohamad speaks at a press conference during the 22nd Asean-China Summit at IMPACT Muang Thong Thani, Bangkok November 3, 2019. — Bernama pic

BANGKOK, Nov 4 — Putrajaya rejected Goldman Sachs’ offer to settle its role in the 1Malaysia Development Berhad (1MDB) financial fraud scandal because it was “too low”, Tun Dr Mahathir Mohamad said today.

The prime minister did not disclose the exact amount — reported to be below US$2 billion (RM8.3 billion) — offered by the US investment bank as reparations for its role in preparing the bonds, but said the case was of “great public interest” and that the government will go to court as a final resort if it fails to negotiate a better deal.

“They caused us to lose US$7 billion. But of course they may not be able to pay that amount. They may not want to pay that amount. But their offer is too low. And because of that, we did not accept their offer,” he told Malaysian journalists covering the 35th Asean Summit here.

Dr Mahathir was elaborating on his remark made during an earlier interview in Bangkok with London-based Financial Times two days ago.

“If cannot reach an agreement, then we will have to go to the courts,” he added.

The prime minister acknowledged that taking the case to court could result in a lengthy wait.

“We have to accept it. Of course, the courts take a long time,” he said.

He pointed out that the 1MDB trial involving his predecessor Datuk Seri Najib Razak has been going on now for “months and months and months; they even postponed the hearing for six months”.

“But we can’t do anything. Because we pledged that we will not interfere with the judiciary.

“This is a case of great public interest. The public wants to know,” he said.

Dr Mahathir said the government cannot disclose the exact sum it is willing to accept from Goldman Sachs to settle the 1MDB saga.

“How much we are willing to accept depends on negotiations. If we cannot agree in negotiations, it has to go to the courts.

“What Goldman Sachs did is very wrong,” he stressed.

He said that normally the entity that arranged for bonds would only charge the government 3 per cent.

He said Goldman doubled the charge on the Malaysian government and even imposed a 10 per cent commission fee on top of that.

“Which means, if you borrow US$100, you only get US$90, but you have to pay interest on US$100. Which means that 6 per cent now becomes 7 per cent. So it’s a very heavy cost to us,” he said by way of illustration.

Dr Mahathir told Financial Times last Saturday that Goldman Sachs offered “something like less than US$2 billion” which his government regarded as unreasonable.

In 2012 and 2013, the US investment bank raised US$6.5 billion for 1MDB, much of which the US has alleged was ultimately stolen in a scheme masterminded by Malaysian fugitive Low Taek Jho or Jho Low, a central figure in the scandal who has denied wrongdoing.

Malaysia has charged Goldman Sachs under the Capital Markets and Services Act 2007 over its role in the bond issue.

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