We got better deal on Goldman Sachs settlement, says Tengku Zafrul

Updated 3 years ago · Published on 2 Aug 2020 10:50AM · 2 Comments

New York-based Goldman Sachs will pay Malaysia a minimum net sum of US$1.4 billion from an agreed list of assets over the next five years. – AFP pic, August 2, 2020.

PUTRAJAYA struck a better deal on its settlement with Goldman Sachs compared with what was offered previously, The Edge quoted Finance Minister Tengku Zafrul Tengku Abdul Aziz as saying.

Goldman Sachs will be paying US$2.5 billion (RM10.8 billion) cash with the remainder US$1.4 billion guarantee on assets that have yet to be recovered.

The investment bank agreed that Malaysia will receive a minimum net sum of US$1.4 billion from an agreed list of assets over the next five years.

The payment is to resolve outstanding charges and claims related to three bond transactions that the investment bank arranged for 1Malaysia Development Bhd.

The previous offer was US$1.75 billion.

“Malaysia will now receive more cash and a higher asset guarantee. With this settlement, the people of Malaysia are getting back substantially more than what was offered before,” Tengku Zafrul told the business weekly.

While Putrajaya has a strong case, there were other issues to consider, such as a complex legal process, he said.

Hence, Malaysia would not see the money from Goldman Sachs for many years.

“The illusion of fighting for billions, indeed seems more attractive.

“But there is a big difference between what a claiming party demands and what he will eventually receive,” he added.

The quantum will depend on the courts and then there is legal cost and host of other issues, Tengku Zafrul said, explaining why the government chose to settle.

Opposition leaders, including Dr Mahathir Mohamad and former finance minister Lim Guan Eng criticised the settlement.

Dr Mahathir said taxpayers were the ones who will suffer under Perikatan Nasional’s deal with Goldman Sachs.

The former prime minister, whose government sued Goldman Sachs over its role in bond sales related to 1MBD, said the bank should be paying US$9.6 billion.

Lim, meanwhile, said that the government must assure the public that it has not sold Malaysians short or allowed Goldman Sachs to get off too lightly over its role in one of the largest financial scandals in history. – August 2, 2020.

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Comments

  • Yes, that is a credit for you as you have confirmed how enormous the size of the theft is. Keep it up!

    Posted 3 years ago by Tanahair Ku · Reply

  • Legal costs and length of time to recover are not major considerations. The quantum of recovery is key. We should have not agreed so fast as the incremental is not substantial. Should have held out for at least 2x the amount for the loss incurred by the country was a lot more. The bank will be forced to settle at the higher amount to salvage their reputation and reverse hefty provisions from their books.

    Posted 3 years ago by Super Duper · Reply