Four years ago, Goldman Sachs was one of the top performing banks in Malaysia but last year, it ranked 17th for local mergers and acquisitions.
Bloomberg reports that, in fact, it was not credited with any equity or debt deal last year.
The performance of Goldman Sachs in Malaysia runs parallel to the rise and fall of its star banker Tim Leissner who played a major role in 1MDB bond dealings.
A Bloomberg report, detailing the habits and expertise of Leissner, paints a picture of an ambitious man who knew what to do.
It says, when Leissner took over as Goldman Sach’s head of investment banking in Singapore, it had just cleaned up a mess there. But within a few years, the “networking maestro” had helped the bank soar in Southeast Asia — culminating in billion-dollar deals with 1MDB.
The man who joined the firm in 1998, cultivated the rich and the powerful and brought in good business. Soon, he became the firm’s Southeast Asia chairman.
Goldman Sachs was the adviser on such deals as the one involving the conglomerate controlled by billionaire Syed Mokhtar Al-Bukhary taking over Malakoff Bhd, and when billionaire T. Ananda Krishnan’s Maxis went public.
Later, Leissner hit it big with the 1MDB deal. The Bloomberg report says, “The firm made US$593 million working on three bond sales that raised US$6.5 billion for 1MDB in 2012 and 2013, according to a person with knowledge of the matter, dwarfing what banks typically make from government deals”.
It went on to quote 1MDB President Arul Kanda as saying in an interview: “There were large requirements and Goldman was one of the few firms, in fact the only firm, that could provide the solution that was required. Overall the objectives were met.” Arul, the report added, declined to comment specifically on Leissner.
But, the report noted, if Leissner’s links to the rich and powerful fuelled his Goldman career, they also helped end it.
The report said: “The good times didn’t last. At least US$681 million landed in the prime minister’s (Najib Razak’s) personal bank accounts that year (2014), money his government has said was a gift from the Saudi royal family. The windfall triggered turmoil for him, investigations into the state fund he oversees and trouble for Goldman Sachs, which helped it raise US$6.5 billion.”
The probes on Najib and 1MDB – both in Malaysia and in at least three other countries – and his work on an Indonesian mining deal and an allegedly inaccurate reference letter affected his position at Goldman Sachs. He was put on leave in January and in February US authorities subpoenaed him over 1MDB investigations. He soon quit the firm.
Goldman Sachs reviewed the 1MDB deal too but found no indication that the firm or Leissner had engaged in wrongdoing, the report said.
The report said a spokesman for Najib declined to comment for this story and that Jho Low didn’t respond to e-mails. Leissner’s lawyer, Jonathan Cogan, didn’t respond to messages. Edward Naylor, a spokesman for Goldman Sachs, declined to comment.
The US authorities are exploring whether Goldman Sachs misled 1MDB bondholders or broke anti-corruption laws, the Wall Street Journal reported last week.