Goldman Sachs' ties to scandal-plagued 1MDB run deep

Goldman Sachs' ties to scandal-plagued 1MDB run deep

On a yacht moored at Saint-Tropez, Malaysian Prime Minister Najib Razak talked business with Abu Dhabi's crown prince. Included in the horseshoe of chairs set up for the July 2013 gathering was a partner from Goldman Sachs Group Inc.

The bank earned its place through years of cultivating Mr. Najib and a state investment fund he founded. Goldman had raised US$6.5 billion (S$9.4 billion) for the fund and earned nearly US$600 million in fees, making the Malaysian client among its most lucrative.

Mr. Najib lavished praise on Goldman, said people familiar with the meeting. "Do you see any other bankers on this boat?" one recalls him saying.

Read also: Ex-BSI banker found guilty in Singapore of charges linked to 1MDB probe

Today Mr. Najib and the state fund, 1Malaysia Development Bhd., or 1MDB, are at the centre of what investigators consider one of the largest financial frauds in history. Investigators have said 1MDB was used by the prime minister as a political slush fund and by associates of his to buy more than US$1 billion of real estate, art and other luxuries from London to Beverly Hills, California.

Among all the firms touched by the scandal, which include banks around the world, Goldman holds a unique position for its closeness to 1MDB and the principals.

on SPH Brightcove

When the Malaysian fund, which Swiss investigators have labelled a Ponzi scheme, ran into roadblocks in its quest to raise cash, Goldman helped keep the money flowing through bond sales.

US Justice Department investigators are trying to determine whether Goldman had reason to suspect that money it helped 1MDB raise was misused and, if so, whether the bank was obligated to report any concerns to authorities.

Read also: Ex-Goldman banker linked to 1MDB scandal had jet-set lifestyle with glamorous wife

Ex-Goldman banker had jet-set lifestyle with glamorous wife

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    Tim Leissner, whom Monetary Authority of Singapore plans to sanction, was once a star banker with Goldman Sachs Group known for his ability to cut deals and living the high life with his glamorous model-wife Kimora Lee Simmons.

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    He reportedly met his wife on a flight from Hong Kong to Kuala Lumpur. It began with an argument and ended with a marriage proposal, according to an interview in the Wall Street Journal.

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    Ms Lee Simmons' social media accounts chronicle the couple's jet-set life, including holidays on luxury yachts in the Caribbean.

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    In snapshots she posted to Twitter, she is seen with Malaysian Prime Minister Najib Razak

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    She also posted a photo with Mr Najib's wife, Rosmah Mansor.

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    Mr Leissner, 45, Goldman Sachs' former Southeast Asia chairman, is facing scrutiny over breaches related to the illegal diversification of billions of dollars from Malaysian wealth fund 1MDB.

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    The Monetary Authority of Singapore plans to bar him from the securities industry for 10 years.

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    He was found to have issued an unauthorised reference letter to a financial institution based in Luxembourg in June 2015, using the company letterhead. The letter stated that Goldman had conducted due diligence on Malaysian financier Low Taek Jho and his family, and had not detected any money laundering concerns with respect to Mr Low or his family.

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    Mr Leissner joined Goldman Sachs in 1998. By 2009, Mr Leissner - known for his networking skills - was helping Goldman Sachs score billion-dollar deals with 1MDB, in which Goldman Sachs pocketed a neat US$593 million working on three bond sales.

 

Read the full article here

OTHER WSJ.COM STORIES:

- How a Malaysian Scandal Spread Across the World

- Singapore to Ban Former Goldman Banker in Connection With 1MDB Scandal

- Malaysia Controversy

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