1MDB Affair: Goldman Sachs Apology ‘Not Enough,’ Malaysian Minister Says

Malaysia’s finance minister on Friday described an apology from global financial firm Goldman Sachs over its links to the 1MDB scandal as inadequate, and demanded that it pay U.S. $7.5 billion (30.85 billion ringgit) in compensation to resolve the issue.

Minister Lim Guan Eng was responding to Goldman CEO David Solomon’s apology to the Malaysian public earlier this week for the role played by the firm’s ex-Southeast Asian head, Tim Leissner, in the 1MDB fiasco, which led to the ouster of the Prime Minister Najib Razak’s government last year.

“Apology is not enough. It is necessary, but not sufficient enough. We are seeking the $7.5 billion,” the finance minister said in Putrajaya, Malaysia’s administrative capital.

“If we didn’t change the government on May 9, would Goldman Sachs ever issue an apology?” he asked.

Leissner pleaded guilty in a U.S. court last year to conspiring to launder money and bribery over his dealings in the scandal around 1MDB, a sovereign wealth fund started by Najib 10 years ago.

Leissner said in a court statement that he had concealed certain facts from Goldman, claiming that this was “very much in line” with the culture at the bank, according to reports.

Another ex-Goldman banker, Roger Ng, was arrested in Malaysia in November at the request of U.S. authorities and is fighting extradition to the U.S. after pleading not guilty to charges that Malaysian authorities have filed against him.

About U.S. $4.5 billion was misappropriated from 1MDB by high-level officials of the fund and their associates between 2009 and 2014, according to the U.S. Justice Department.

Goldman had arranged three bond sales that raised $6.5 billion for 1MDB but, according to the Wall Street Journal, much of the total had gone missing.

Following his electoral defeat, Najib has been charged with dozens of counts of corruption, criminal breach of trust and money laundering involving 1MDB-related monies.

On Wednesday, Solomon apologized to the Malaysian people for Leissner’s role in the 1MDB affair.

“It’s very clear that the people of Malaysia were defrauded by many individuals, including the highest members of the prior government,” he said.

“For Leissner’s role in that fraud, we apologize to the Malaysian people.”

Najib on Thursday responded to Solomon's apology by saying that Goldman Sachs must take full responsibility for failing to protect Malaysia’s interests in the scandal.

Speaking in an interview with CNN in Hong Kong, Lim said it was reasonable for Malaysia to seek the return of U.S.$ 7.5 billion from the financial firm after the agony and trauma that the nation had endured because of the scandal.

“You must have a heart. Sometimes you ask, does Goldman have a heart?” Lim was quoted saying.

Meanwhile, Oh Ei Sun, a senior fellow at the Singapore Institute of International Affairs, said Goldman Sachs was obviously trying to placate the Malaysian government as Kuala Lumpur sought reparations for the bank’s dealings with 1MDB.

“But they are also trying to reverse American investors’ negative perception of their stock performance,” he told BenarNews.

Oh explained that the actual reimbursement or compensation was the least of the banking giant’s concerns, saying investors’ attitudes as well as future prospective clients’ preferences were more important.