THE Perikatan Nasional government’s settlement deal with Goldman Sachs was rushed and premature, resulting in the government giving up its greater bargaining power, said former attorney-general Tommy Thomas.

“Any litigation lawyer would advise that the leverage that his client would have, whether as plaintiff in civil proceedings or as prosecutor in criminal proceedings, is to start a trial with the maximum negative publicity against the adverse party.

“This advantage was lost by the present administration because the settlement was rushed and premature.

“There are no objective reasons to have reached a settlement at this point in time.

“What ought to have happened was to start the criminal trial against Goldman Sachs and its directors. From Malaysia’s perspective, any settlement should have only taken place in the middle of the trial or after the verdict is announced,” he said in a statement today.

He added there were two practical advantages of charging Goldman Sachs companies and their directors in court.

“First, criminal charges ensure greater bargaining power for Malaysia.

“Secondly, the same court can order compensation or damages to reflect Malaysia’s losses arising from the three bonds that Goldman Sachs had designed and structured,” he said.

He said the government would have had leverage over the bank and directors if the trials had started.

Thomas said he had charged the Goldman Sachs companies in December 2018, followed by charges against 17 of their directors in August 2019.

They would have been jointly tried, he said.

“We have a very strong case against all the accused, which we would have established at trial.

“We were confident that upon conviction, the trial court would in addition to sending the individual directors to jail, order the Goldman Sachs companies and the individuals to pay compensation.”

He was referring to Finance Minister Tengku Zafrul Tengku Abdul Aziz’s reported remarks that Putrajaya had struck a better deal with its settlement with Goldman Sachs and was getting substantially more than what was previously offered.

The settlement comprises a cash payment of US$2.5 billion (RM10.5 billion) to Malaysia and a guarantee that at least US$1.4 billion in assets acquired with misappropriated funds would be recovered 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. – August 3, 2020.