Sunday, April 5, 2015

Goldman Sachs and 1MDB

Knowingly or unknowingly, US investment banking group Goldman Sachs have got themselves dragged into the 1MDB debacle.

Raub MP Mohd Ariff Sabri Abdul Aziz had questioned PM Najib Razak (also the Finance Minister and chairperson of 1MDB’s advisory board) about 1MDB paying high interest rates (i.e. 5.75%) to New York-based Goldman Sachs Group Inc to manage their RM5 billion Islamic bonds. Najib was quick to dismiss the above as “baseless”. Really ah? And I would like to know since when do Islamic bonds pay interests?

Fellow DAP colleague and Petaling Jaya Utara MP Tony Pua seized the opportunity to also question Najib’s reluctance to reveal details of the commissions, fees and expenses paid to the said company – the latter's reply was that the payments were “reasonable”.

Najib's responses were sparse and simple. They didn't tell us anything and of course, they did not satisfy Malaysians.

In fact, Pua had revealed that $196 million (RM630 million) and $283 million (RM906 million) were deducted for the commissions and fees to Goldman Sachs for managing 1MDB's bonds. These amounts worked out to an immoderate 11.2% and 9.4% of the funds raised. Excessive. Exorbitant. Unreasonable.

Malaysians would sure like to know why Goldman Sachs received such a good deal. But maybe it was just business? If it's so damn difficult to get a loan and somebody can make it happen, then whatever the quantum of fee you pay to procure that becomes "reasonable". And we are talking about 1MDB here.

Goldman Sachs’s involvement came about when they advised the Malaysian government on the formation of 1MDB and helped to secure borrowings.  

Tim Leissner is the point man – he joined Goldman Sachs in 1998 and quickly ascended the company ranks to be co-president of the company’s Singapore office and is currently chairperson of the Southeast Asia division. But was it just about Leissner being at the right place and at the right time and therefore, he managed to sniff out a golden opportunity for his company? Or was there something else to it?

Did you know that Leissner is married to model Kimora Lee Simmons – who happens to be a good friend of our Prime Minister’s family? Kimora's websites have pictures of her, Leissner, Rosmah and Najib.

Good friends: Rosmah and Kimora

Najib’s web of friendships is really interesting. And profitable too.

Liverpool were outclassed 1-4 by Arsenal on Saturday. This means that Arsenal tightened their grip on a place in the EPL's top four while inflicting damage on Liverpool's Champions League aspirations.

Disappointing Liverpool!

On Friday, a top team faced a bottom team and we had an outcome that didn't raise eyebrows. Celtic overcame a very defensive St Mirren 2-0 thanks to a clever James Forrest goal (64) and a Stefan Johansen penalty (79). The former moved eight points clear at the top of the Scottish Premiership table.

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