TAXPAYERS are the ones who will suffer under Perikatan Nasional’s deal with American bank Goldman Sachs in the 1Malaysia Development Bhd scandal, said Dr Mahathir Mohamad.  

The former prime minister, whose government had sued Goldman Sachs over its role in bond sales related to 1MBD, said the bank should be paying US$9.6 billion (RM41 billion) to Malaysia. 

Under PN’s deal, Malaysia is only getting US$3.9 billion, of which US$2.5 billion is in cash while US$1.4 billion are proceeds from asset sales conducted by the US Department of Justice.  

“So actually, Goldman Sachs would be paying back only US$2.5 billion. That is very much less than what it should pay,” Dr Mahathir said in the latest post on his blog, Chedet.cc.

“Its initial offer of US$1.75 billion was ridiculous. It was objected to in favour of a settlement in the courts,” said Dr Mahathir referring to the former Pakatan Harapan government’s case against Goldman Sachs.  

Before it was deposed by PN in late February, PH filed 17 charges against Goldman Sachs while US authorities prosecuted two of its senior executives for their role in the 1MBD bond sales.

“It must be remembered that the money was borrowed by 1MDB. Now the minister of finance will have to pay the lenders,” Dr Mahathir said, referring to funds borrowed by 1MDB from those bonds.  Dr Mahathir said under PN’s deal, the government will still have to pay bond holders US$4.85 billion.

“This will be a charge basically to the taxpayers. I suggest the government withdraw its agreement to accept the US$2.5 billion offered by Goldman Sachs.”

Last Sunday, Lim Guan Eng, who was Dr Mahathir’s former finance minister, said there were three 10-year bonds arranged by Goldman Sachs guaranteed by Putrajaya:

* US$1.75 billion at a 5.99% interest rate issued on May 18, 2012;

* US$1.75 billion at a 5.75% interest rate issued on October 17, 2012; and,

* US$3 billion at a 4.4% interest rate issued on March 16, 2013.

PH had demanded that Goldman Sachs return the sum of these bonds and the interest accrued. – July 28, 2020.