Related News: https://www.freemalaysiatoday.com/category/nation/2023/03/01/haul-1mdb-goldman-sachs-settlement-negotiators-before-pac-says-c4/
Coverage by: Free Malaysia Today (FMT)
PETALING JAYA: Those involved in the negotiation between Putrajaya and Goldman Sachs over the 1MDB scandal should be brought before the Public Accounts Committee (PAC), says an anti-corruption group.
Pushpan Murugiah, CEO of the Center to Combat Corruption and Cronyism (C4), said there were unanswered questions such as why Malaysia had agreed to such a low settlement sum and who were the key people behind the deal.
“How do we ensure that no one is profiteering over these assets by manipulating their value? The opaque nature of the whole transaction calls for better accountability and transparency. This has to be looked at seriously by either the PAC or a parliamentary select committee,” Pushpan told FMT.
“If no acceptable reason can be found as to why the discount (in settlement) was given to Goldman Sachs, those involved in the negotiations and decision-making process must be brought to account and if corruption is involved, they must be charged and brought to justice.”
In 2020, the government led by then prime minister Muhyiddin Yassin reached a settlement with Goldman Sachs that involved the investment bank paying the government US$2.5 billion in cash and guaranteeing the return of US$1.4 billion in 1MDB assets seized by authorities around the world.
Goldman Sachs had acted as the financial adviser and lead manager for three bonds issued by 1MDB worth US$6.5 billion, earning US$606 million in fees in the process.
Pushpan said there were also concerns that the transaction was done without proper oversight and questioned how the US$1.4 billion in assets would be recovered.
Meanwhile, former top treasury official Ramon Navaratnam said negotiated settlements could be subject to abuse, as there was no third party to arbitrate the figures reached.
He said in the Goldman Sachs case, the present government should carry out an audit to declare what would be seen as a reasonable and fair settlement.
“Both sides will say it is a good deal, but anyone can see it is a small amount. Why not go to court or go through arbitration? And if they are found to be unfair and unreasonable, let the whole world know that this big financial giant is abusing its integrity in giving such a small sum.
“Here is a brazen case of obvious dishonesty. You make so much, how come you settle for so little? A strict professional audit, by the likes of the International Monetary Fund or the World Bank, or any international group (is required),” the former treasury deputy secretary-general said.
Titiwangsa MP Johari Ghani said it was “clear-cut” that Goldman Sachs had “cheated” and “short-changed” the government in the 1MDB negotiations.
“What is strange is that we know they are guilty, yet we settled for so little – only US$2.5 billion, when our exposure was US$6.5 billion,” he told the Dewan Rakyat on Monday.
Johari said if 1MDB had taken legal action against Goldman Sachs in the US, the bank would have come under a lot of pressure as it would not have been able to underwrite loans.
He had also called on the government to publish the terms of the settlement agreement, which has so far been withheld from public scrutiny allegedly due to a confidentiality provision which prohibits its release.