Press Statement: Goldman Sachs Settlement: Can we Have Some Transparency Over This Deal, Please?


Press Statement dated 5th August 2020


The decision by the Perikatan Nasional government to accept a settlement with Goldman Sachs for US$2.5 billion in payment of penalty and US$1.4 billion in asset value guarantee leaves gaping holes in logical reasoning for the hurried settlement. Without a doubt, this does not do justice to the crime Goldman has participated in.


The “successful” settlement somehow misses the point.


It disregards the severity of the crime and sidesteps the prominent role Goldman had played in this entire episode of widescale corporate fraud. We must remember here, that this is not a case of compliance failure by a certain individual or agent of the bank as claimed by Goldman, rather it was a full-scale structural scam approved and participated by the its top management to scheme and rob billions of U.S dollars. An extraordinary and exorbitant bank fee of US$600 million was charged to 1MDB. All red flags were disregarded. It would also be impossible for bonds totalling to US$6.5 billion to have been issued without thorough management scrutiny and approval.


C4 Center believes that this was the very reason the previous government had decided to prosecute Goldman Sachs and 17 others including the directors under Section 179(c) of the Capital Markets and Services Act, 2007 (CMSA). The evidence out there is clear and a conviction is highly probable according to former Attorney-General Tommy Thomas. He further clarified that in addition to secure a conviction, which would render a sharp slap on the credibility and reputation of the wall street bank, the courts could order Goldman to pay compensation on the same basis a civil court would under the CMSA as demonstrated in previous cases of Pesaka and Aldwich.


The following issues beg transparent answers from our Finance Minister Tengku Zafrul:

  1. Why then did current Attorney General Idrus Harun amend the criminal charge and allow for a civil disgorgement under the Capital Services and Market Act 2009?
  2. Did Goldman come out the only winner here? While we look rather short-changed with the short end of the stick?
  3. What was the reason for the rushed settlement?
  4. Was the settlement obtained in a hurry to help the struggling economy?
  5. Where will the monies be deposited and how will it be disbursed? Is there a plan?


The Perikatan Nasional government that abruptly replaced Pakatan Harapan must put forth a strong message to financial institutions and corporations that they cannot get away with massive consequential corporate fraud, money laundering financial crimes and corrupt practices.


Released by:
C4 Center