Ex-Goldman Sachs banker denies four charges
KUALA LUMPUR: Former Goldman Sachs banker Roger Ng Chong Hwa was charged at the Sessions Court here yesterday on four counts of abetting Goldman Sachs pertaining to the sale of guaranteed notes and bonds belonging to a 1Malaysia Development Berhad (1MDB) subsidiary amounting to US$6.5 billion by omitting material facts and making false statements.
However, Ng, 46, pleaded not guilty to all the charges that were read out to him before Judge Datuk Ahmad Kamal Arifin Ismail.
The court allowed Ng bail at RM1 million in two sureties for all the charges and ordered him to surrender his passport to the court and fixed March 18, 2019 for mention.
Deputy public prosecutor Manoj Kurup had urged the court to set bail at RM1 million bail in two sureties for all the charges while Ng, represented by Datuk Tan Hock Chuan, sought a lower bail, at RM600,000.
“I have no objection about my client handing over his passport to the court,” Tan said to which Manoj replied: “This is not an ordinary case.”
On the first charge, Goldman Sachs International (incorporated in the United Kingdom), as the manager and coordinator for the sale of US$ 1,750,000,000 5.99 % guaranteed notes maturing in 2022 to be issued by 1MDB Energy Limited (incorporated in the Federal Territory of Labuan, Malaysia), between March 19, 2012 and Sept 25, 2012 at 1Malaysia Development Berhad (1MDB), at Level 8, Menara IMC, No. 8, Jalan Sultan Ismail, here, had allegedly omitted these material facts, namely:
(i) a person named Low Taek Jho, 37, is the principal controller and intermediary of 1MDB, the parent company of 1MDB Energy Limited;
(ii) 1MDB Energy Limited and Aabar Investments P.J.S. Limited (Aabar Limited) had signed a ‘Collaboration Agreement for Credit Enhancement’, on May 21, 2012, whereby 1MBD Energy Limited had agreed to pay Aabar Limited an additional credit and collateral sponsorship in cash (collateral credit enhancement) as a reward to Aabar Limited in securing a guarantee from International Petroleum Investment Company P.J.S.C. (IPIC), on behalf of 1MDB Energy Limited, that the Notes and the collateral credit enhancement shall be payable from the proceeds from the issuance of the Notes;
(iii) 1MDB Energy Limited and Aabar Limited had signed an ‘Option Agreement’ on May 18, 2012 whereby 1MDB Energy Limited had granted Aabar Limited an option to purchase of up to 49 % of the shares held by 1MDB Energy Limited within 1MDB Energy Sdn Bhd, as a reward to Aabar Limited in securing IPIC as a guarantor to secure payment of all the specified amounts payable from time to time by 1MDB Energy Limited in respect of such Notes; and
(iv) 1MDB and IPIC had signed an ‘Inter-Guarantor Agreement’ on May 21, 2012, whereby 1MDB had fully underwritten all amounts falling due and payable under the notes, including all expenses, damages, liabilities incurred or suffered by IPIC, and in the event of 1MDB was unable to meet the underwriting obligations, it was to seek assistance from the Ministry of Finance Inc to provide the necessary funding and support to repay IPIC in full, as stated in the Offer Circular dated May 18, 2012, for the Notes, namely:
(i) statements relating to ‘ Management of 1MDB Guarantor’ on pages 50-52;
(ii) statements relating to ‘Use of Proceeds’ made on page 29;
(iii) statements of ‘Strategic Alliance between 1MDB Guarantor and IPIC Group’ on page 37;
(iv) statements of ‘Guarantee and Status’ made on pages 96 and 97;
Therefore, Goldman Sachs International was accused of committing an offence under Section 179 (c) of the Capital Markets and Services Act 2007 and punishable under Section 182 of the same Act, and that Ng had allegedly abetted Goldman Sachs International to commit the offence.
Ng was alleged to have committed the offence at the 1MDB office, between March 19, 2012, and Sept 25, 2012.
On the second count, Goldman Sachs International is charged as the book runner and arranger for the sale of US$3,000,000,000 4.4 per cent Guaranteed Notes maturing in 2023 to be issued by 1MDB Global Investments Limited (incorporated in the British Virgin Islands) (“1MDB GIL”) (“the Notes”) directly in connection with the sale of the Notes, making an incorrect statement about the material facts in the Offering Circular dated March 16, 2013, for the Notes as following:
“The Issuer will either on-lend all of the net proceeds of this Offering to ADMIC or use the net proceeds of the offering to fund its investment in ADMIC (Abu Dhabi Malaysia Investment Company Ltd) , which will be a 50:50 joint venture between the Issuer and Aabar”, made on page 24 under the heading "USE OF PROCEEDS".
Therefore, the company has committed an offence under sub-section 370(c) read together with subsection 179(c) of the same Act, punishable under Section 182 of the same Act, and that Ng had abetted Goldman Sachs International in the commission of that offence, where the offence had been committed in consequence of abetment of the accused.
Ng was charged with committing the offence at the same place here between March 12, 2013, and November 11, 2013, under Sub-section 370 (c) read together with Subsection 179 (c), punishable under Section 182 of the same Act which provides for imprisonment for a term not exceeding 10 years and fined not less than RM1 million, upon conviction.
The third count, stated that Goldman Sachs as the Arranger for the sale of US$1,750,000,000 5.75 per cent Guaranteed Notes due 2022 to be issued by 1MDB Energy (Langat) Limited between Aug 10, 2012 and Oct 17, 2012, in the same place, directly in connection with the sale of the Notes, omitted to state the following material facts, namely:
(i) one Low Taek Jho was the operator and key intermediary for 1MDB, which was the parent company of 1MDB Energy (Langat) Limited;
(ii) 1MDB Energy Holdings Limited and Aabar Investments P.J.S. Limited (“Aabar Limited”) had signed a Collaboration Agreement For Credit Enhancement dated Oct 19 2012 where 1MDB Energy Holdings Limited agreed to procure 1MDB Energy (Langat) Limited to pay Aabar Limited a credit enhancement and underwriting contribution in cash (“Credit Enhancement Collateral”) in consideration of Aabar Limited procuring a guarantee from International Petroleum Investment Company P.J.S.C. (“IPIC”), in favour of 1MDB Energy (Langat) Limited, guaranteeing the Notes, and the Credit Enhancement Collateral was to be paid from the proceeds of the issue of the Notes; and
(iii) 1MDB Energy (Langat) Limited and Aabar Investments PJS had signed a Collaboration Agreement (Option) dated Oct 17, 2012 wherein 1MDB Energy (Langat) Limited had granted to Aabar Investments PJS the option to purchase up to 49 per cent of the shares owned by 1MDB Energy (Langat) Limited in 1MDB Energy Langat Sdn Bhd, in consideration of Aabar Investments PJS procuring IPIC as a guarantor to guarantee the payment of all sums expressed to be payable from time to time by 1MDB Energy (Langat) Limited in respect of the Notes.
It was necessary in order to make the following statements made in the Private Placement Memorandum dated Oct 17, 2012, for the Notes, that is :
(i) statements on “MANAGEMENT OF THE GUARANTOR” made at pages 48 to 51;
(ii) statements on “USE OF PROCEEDS” made at page 20;
(iii) “In connection with the strategic alliance that the Guarantor has with the IPIC Group, the Issuer has granted a call option in favour of the Nominated Subsidiary or its subsidiaries in relation to certain of the shares the Issuer holds in 1MDB Energy (Langat) (“the 1MDB Energy (Langat) Call Option Shares”) made at page 30; and
(iv) “The Notes have the benefit of a guarantee from 1Malaysia Development Berhad, a company incorporated in Malaysia with limited liability and which is wholly-owned by the Government of Malaysia (the “Guarantor”) under which the Guarantor unconditionally and irrevocably guarantees the payment of all sums expressed to be payable from time to time by the Issuer.” made at page 61.
Therefore the company has committed an offence under the same subsection, and that Ng, have abetted Goldman Sachs International committing the offence, under the same section.
On the fourth count, Goldman Sachs International as the Bookrunner and Arranger for the sale of US$3,000,000,000 4.4 per cent Notes due 2023 to be issued by 1MDB Global Investments Limited (incorporated in British Virgin Islands) (“1MDB GIL”) (“the Notes”), between March 12, 2013, and Nov 11, 2013, at the 1MDB office here, directly in connection with the sale of the Notes, omitted to state the following material facts:
That a person named Low was the operator and key intermediary for 1MDB, which was the parent company of 1MDB GIL, which was necessary in order to make the following statements made in the Offering Circular dated March 16, 2013 for the Notes, namely, statements on “Management of 1MDB” and “Corporate Governance of 1MDB” made at pages 37 to 39.