‘Goldman Sachs cheated us’

> PM says evidence shows US banking group ‘has done things that are wrong’

KUALA LUMPUR: Goldman Sachs Group Inc “cheated” Malaysia over its dealings with state fund 1MDB, which is the subject of corruption and moneylaundering investigations, Prime Minister Tun Dr Mahathir Mohamad told CNBC in an interview aired yesterday.

The United States, Malaysia and at least four other countries are investigating how billions of dollars went missing from 1MDB, founded by former premier Datuk Seri Najib Razak.

US prosecutors filed criminal charges against two former Goldman Sachs bankers earlier this month. One of them, Tim Leissner, pleaded guilty to conspiracy to launder money and conspiracy to violate the Foreign Corrupt Practices Act, Bernama reported.

Goldman Sachs earned about US$600 million (RM2.5 billion) in fees for its work with 1MDB, which included three bond offerings in 2012 and 2013 that raised US$6.5 billion.

Mahathir said “there is evidence that Goldman Sachs has done things that are wrong”.

“Obviously, we have been cheated through the compliance by Goldman Sachs people,” he said in the interview.

The bank’s compliance controls “don’t work very well”, he added.

A Goldman Sachs spokesman in Hong Kong declined to comment on the allegation, while the bank yesterday denied any wrongdoing.

Goldman Sachs shares fell to their lowest in nearly two years yesterday after Finance Minister Lim Guan Eng said Malaysia would seek a “full refund” of the fees from 1MDB deals from the bank.

The US Department of Justice has said about US$4.5 billion was misappropriated from 1MDB by high-level officials of the fund and their associates between 2009 and 2014.

Najib has been charged with corruption as part of the investigations into 1MDB. He has pleaded not guilty and denied any wrongdoing.