Goldman Sachs sued for ties to PM

Finance firm is accused of aiding corruption in Malaysia

The New York Times

A private equity firm is suing Goldman Sachs, accusing it in court documents filed Tuesday of improperly trying to curry favor with the scandal-plagued prime minister of Malaysia.

The firm, Primus Pacific Partners, said Goldman provided bad advice to one of its clients to help the financial fortunes of the Malaysian prime minister, Najib Razak.

The prime minister and people close to him have been previously accused by U.S. authorities of embezzling billions of dollars from a Malaysian state investment fund, 1Malaysia Development Berhad, or 1MDB.

Last week, U.S. authorities moved to seize multiple luxury properties that were believed to have been bought with the embezzled money by people close to Mr. Razak.

Mr. Razak has denied the accusations of impropriety and shut down investigations within Malaysia, but multiple inquiries are moving forward in other countries.

Goldman is already being questioned for helping run bond offerings that the prime minister used to raise some of the money he is accused of embezzling.

Goldman’s star banker in the region, Tim Leissner, was a close financial adviser to Mr. Razak’s administration. Mr. Leissner left Goldman this year as accusations of improper activity related to 1MDB were raised.

Primus Pacific Partners filed the lawsuit against Mr. Leissner and Goldman in New York’s state Supreme Court in Manhattan.

The complaint said that in 2010, Mr. Leissner and Goldman advised one of the bank’s clients, the Malaysian bank EON Capital, that it should sell itself to another bank, Hong Leong Bank, which had financial ties to the Malaysian prime minister. The lawsuit says that Goldman used information acquired through its work advising EON Capital to help Hong Leong Bank submit a successful bid for EON. The suit also says that Goldman advised EON to accept the bid even though it could have received more money from other bidders.