Prove you weren’t duped in 1MDB settlement, Guan Eng tells Putrajaya

Goldman Sachs has agreed to pay the government US$2.5 billion in cash and an additional US$1.4 billion coming from 1MDB assets seized by authorities. (Bloomberg pic)

PETALING JAYA: Lim Guan Eng said Putrajaya must reassure the public that it was not duped by Goldman Sachs in resolving charges and claims linked to the three bond transactions the company had arranged for 1MDB.

The former finance minister claimed the financial world saw the investment bank as “getting off cheaply” by paying only one-third of the initial demand of US$7.5 billion made by the previous government.

Pakatan Harapan had demanded the sum in exchange for dropping criminal charges against the bank and 17 current and former Goldman Sachs directors.

“Public interest and accountability demand that the Perikatan Nasional government answer whether justice is served by allowing Goldman Sachs to pay one-third of the US$7.5 billion in exchange for absolving them of all criminal punishment,” Lim said in a statement today.

Lim Guan Eng

Goldman Sachs had last month agreed to a total settlement of US$3.9 billion (RM16.6 billion).

The settlement includes cash payment of US$2.5 billion and a guarantee of a full recovery value of at least US$1.4 billion in assets that are traceable to the diverted proceeds from the three bond transactions.

Lim said the government “cannot hide the fact” that the US$1.4 billion is not paid by Goldman Sachs but will be derived from assets of 1MDB seized by authorities around the world.

To forgo the initial US$7.5 billion claim with only US$3.9 billion ignores the huge debt burden of 1MDB, the DAP secretary-general said.

“The Malaysian government must justify that it was not duped by Goldman Sachs, widely credited as securing a good deal for the US$2.5 billion cash settlement, instead of US$7.5 billion, to defraud 1MDB together with Malaysian leaders and their cronies,” he said.