MALAY SAD SACHS
Goldman sinks on refund request for 1MDB fees
Goldman Sachs’ Malaysia problem keeps getting stickier.
Shares of the Wall Street powerhouse got clobbered on Monday after a top Malaysian official claimed the bank owed the country a “full refund” of $600 million for its role in an international fraud masterminded by playboy financier Jho Low.
Malaysia’s finance minister reportedly asked for Goldman to return the $600 million in fees it received for underwriting three bond deals that raised $6 billion — about half of which the hard-partying Low used to allegedly bribe foreign officials and fund his opulent lifestyle.
Goldman Sachs has “indirectly” admitted guilt after its former South Asia chairman, Tim Leissner, pleaded guilty to his role in the bribery and money laundering scandal, the official, Lim Guan Eng, said, according to Bloomberg.
Goldman — whose shares plunged 7.5 percent on the news, marking their worst day in seven years — hasn’t admitted wrongdoing, and has said that it’s cooperating with the DOJ’s investigation.
But earlier this month, Leissner, the former chair of Goldman’s Southeast Asia business, roped the company deeper into the scandal when he pleaded guilty to bribery and money laundering, and paid $43.7 million. He has not been sentenced.
Low, who quietly controlled the country’s investment fund 1MDB, had used his ill-gotten gains to throw extravagant parties with Leo- nardo DiCaprio and bankroll Hollywood movies like “The Wolf Wall Street,” according to the US Justice Department, which has indicted Low for bribery and money laundering.
Last week, reports emerged that Goldman Chairman Lloyd Blankfein had met with Low in 2013, even though the bank had raised red flags about the source of Low’s wealth.
Investors took that as a signal that the Low scandal wasn’t necessarily merely a case of a rogue employee at a far-flung outpost, sending Goldman shares tumbling.
The Justice Department also claims that Low — now an international fugitive whose whereabouts are unknown — laundered the 1MDB money by buying luxury apartments in Manhattan, plus masterworks by Vincent van Gogh and Claude Monet.
Last month, the Malaysian government also put up for auction Low’s 300-foot super yacht, “Equanimity,” with an opening bid of $250 million.
Low had allegedly told Leissner and another Goldman banker, Roger Ng, that in order to secure the bond deals, they would have to pay millions in bribes to Malaysian and Saudi Arabian officials, according to an indictment of Low.
“I and several other employees of Goldman Sachs at the time also concealed that we knew that Jho Low was promising and paying bribes and kickbacks to foreign officials to obtain and retain 1MDB business for Goldman Sachs,” Leissner said, according to The Wall Street Journal.
Ng was arrested earlier this month and awaits trial in the US.
Goldman’s stock dropped $16.60, to $206.05, bringing it to its lowest level since November 2016.