FORMER attorney-general Tommy Thomas proposed for Malaysia to reach an out of court settlement with Goldman Sachs over the investment bank’s role in the 1MDB affair, Finance Minister Tengku Zafrul Abdul Aziz told the Dewan Rakyat today.

Tengku Zafrul said Thomas had written a letter to the effect.

“At all material times, the former AG was seeking a settlement with Goldman Sachs. It is disingenuous of him to say that we should not do what he wanted to do in the first place,” he said during his winding-up speech.

He told the house of a “never before revealed letter” dated February 11 from Thomas informing then prime minister Dr Mahathir Mohamad that Goldman Sachs had agreed to raise its offer from US$1.5 billion (in December 2019) to US$1.75 billion to settle the case.

“This amount includes tax payments of US$164 million and fees of US$567 million. 

“Thomas’ recommendation in the letter was to seek an out of court settlement,” said Tengku Zafrul.

He said the sum the two parties finally settled on – of US$2.5 billion cash – was 42% higher than the February offer.

Tengku Zafrul said the government also received a guarantee from the investment bank that Malaysia would receive US$1.4 billion in proceeds from the sale of assets bought with 1MDB money.

Opposition MPs stood up to refute Tengku Zafrul’s claims.

Tony Pua (Damansara-PH), who was in the Finance Ministry during the Pakatan Harapan administration, said Thomas had never stopped the government from pursuing an out of court settlement.

“That is also disingenuous (for you to say),” said Pua.

“What Thomas said was to let the case go to court to obtain the maximum leverage for the highest compensation from Goldman Sachs.”

Tengku Zafrul reminded Pua that although the government had filed a case against Goldman Sachs and its 17 directors, none of them had been brought to court.

“There would be extradition issues and there is no certainty that they could be charged in court,” said the senator.

Former finance minister Lim Guan Eng (Bagan-PH) piped in to ask if the Goldman Sachs deal was approved by the cabinet.

“The cabinet gave the mandate to the attorney-general and his team to negotiate and find a resolution,” answered Tengku Zafrul.

Lim replied by protesting that such an important deal should have had the cabinet’s approval.

Perikatan Nasional lawmakers jumped in before Tengku Zafrul could respond.

“Is it true that BN stole GST refunds as claimed by Lim?” Ahmad Maslan (Pontian-BN) interjected.

This prompted MPs from both sides to launch a volley of accusations at each other.

At this point, Speaker Azhar Azizan Harun brought the 45-minute session to a close while opposition MPs continued to protest that he had not let Zafrul answer their questions.

The Perikatan Nasional government last month accepted Goldman Sachs’ offer of US$2.5 billion to settle a case over the investment bank’s role in the 1MDB financial scandal. The sum is one-third of the US$7.5 billion sought by the Pakatan Harapan government. – August 6, 2020.