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Johari questions ‘poor’ negotiations on Goldman Sachs’ US$2.5bil settlement

KUALA LUMPUR: US investment bank Goldman Sachs’ US$2.5bil (RM10.7bil) settlement over its role in the 1MDB scandal is unfair and Putrajaya should scrutinise previous negotiations held by the former administration, says former second finance minister Datuk Seri Johari Abdul Ghani.

Johari was also perplexed over the poor negotiations that took place between the previous government and Goldman Sachs.

“Why were summonses against Goldman Sachs not filed in the United States?

“Why negotiate without putting the file? Usually negotiations were held after summons were filed; the pressure is better,” said Johari.

“If the suit was filed against Goldman Sachs in the US, the pressure will be strong and they will speak,” added Johari.

Johari also criticised the former government’s willingness to accept the US$2.5bil settlement.

“Why are we sacrificing the money that we could’ve gotten from the number one investment bank in the world? They make billions of profit.

“We were satisfied with the US$2.5bil settlement because we achieved our political objectives.

Meanwhile, Johari also said that investigations in the 1MDB scandal were focused on politics.

“It (the investigations) should’ve involved the entire management. It is impossible for an organisation to be involved with (US dollar bonds totalling) US$6.5bil, but only one person goes to court.

“What happened to the other senior management with big salaries amounting to the millions?” questioned Johari.

Johari said the upper management of entities such as 1MDB, should also be investigated if any scandals arose in future.

Earlier this month, Johari was also quoted by the Thomson Reuters Regulatory Intelligence Report as accusing Goldman Sachs of taking advantage of poor negotiations by former premier Tan Sri Muhyiddin Yassin’s government to delay payments in the settlement agreement made two years ago.

According to the report, the agreement between Muhyiddin’s government and Goldman Sachs expects US$1.4bil (RM6bil) in 1MDB assets by 2025 as part of a RM16.77bil (US$3.9bil) settlement reached over losses incurred by the state investment fund.

An unnamed government legal officer also said it was a bad deal for Malaysia.

“They (the government) should have demanded cash in the bank, not assets,” the unnamed source was quoted as saying.

So far, the terms of the settlement agreement is withheld due to a confidentiality provision that bans its publication.

Reports also stated that among disputes were Goldman Sachs and Putrajaya’s disagreement over the valuation of 1MDB assets.

In January, Prime Minister Datuk Seri Anwar Ibrahim demanded Goldman Sachs to honour its agreement with the government over its role in the 1MDB scandal.

Under a settlement in October 2020, Goldman Sachs was to pay US$2.5bil while guaranteeing the return of US$1.4bil of 1MDB assets seized by authorities around the globe.

Source : THE STAR

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