Malaysia’s Goldman Sachs Offer – Return The $7.5 Billion You Didn’t Steal

Malaysia has made what we might call an interesting offer to Goldman Sachs over the 1MDB scandal – pay Malaysia the $7.5 billion that Goldman Sachs didn’t steal, that no one has stolen, and we’ll say no more about the matter. This is perhaps not the finest ever deal offered to a Wall Street firm – or, indeed, to anyone.

The background is that the Malaysian state set up a development fund. One that turned out to have rather less oversight than might be prudent with such sums of taxpayer money. The former Prime Minister is in very hot water over his possibly having dipped his ladle in the gravy, just as one example.

Goldman Sachs organised a $6.5 billion bond issue for this fund. Allegations are flying around that those executives that did the organising knew about the lax controls, that they would be evaded, therefore Goldman Sachs is responsible.

Well, yes, possibly:

Malaysia could drop Goldman Sachs’ 1MDB charges for US$7.5 billion: Finance Minister Lim Guan Eng

Interesting, no?

An apology from Goldman Sachs Group doesn’t cut it for Malaysia, which said it may consider a discussion to absolve the bank of blame for its role in the 1MDB scandal for US$7.5 billion (S$10.2 billion). The country filed criminal charges against the lender in December, the first for Goldman, and may discuss dropping those allegations if the bank pays the sum, Finance Minister Lim Guan Eng told reporters on Friday (Jan 18).

Malaysia alleges that Goldman misled investors in the three bond sales it arranged for 1MDB, or 1Malaysia Development Berhad, while knowing the money raised would be misappropriated. Units of the bank were accused of making false statements in documents submitted to a local regulator in arranging US$6.5 billion bond offers for 1MDB, from which at least US$2.7 billion was allegedly stolen.

Just for the sake of argument, imagine that the Goldman peeps did know all that is alleged and then acted as alleged. Why should Goldman therefore pay more than they raised for the fund? Why should they pay more than was stolen?

Perhaps even more, why should Goldman pay instead of the people who stole the money? This really might not be the best settlement offer that anyone has ever made.

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Samarkand Tonyliterate3BarksintheCountryian parkinson Recent comment authors
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ian parkinson
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ian parkinson

No idea what is correct but:

Accomplices to a theft so could in theory be liable for the entire sum, Goldman could then of course claim ownership of the assets (so takes on all the risk of theft, asset missvaluation, etc).

literate3
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literate3

Malaysia has been watching US regulators dealing with foreign companies and reckons sauce for the goose is sauce for the gander.
My heart bleeds not for Goldman Sachs whose alumni as Secretaries to the Treasury have condoned the practice of ripping off foreigners.

BarksintheCountry
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BarksintheCountry

Yes, but US “regulators” have been equally strong-handed (and misguided) with local companies as well. A better example might be the EU with its peculiar desire to torture, financially and otherwise, American start-ups such as Google, Microsoft, Amazon, etc.

literate3
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literate3

“equally” – you could have fooled me! My earliest memory of US regulators was of them fining Midland Bank because some Mexicans had stolen money from Crocker, their Californian subsidiary, before Midland bought it. Then charging Cape Asbestos, a South African company with mainly British shareholders, under the Anti-Trust Act for not selling asbestos in the USA when it would have faced charges if it had sold asbestos in the USA; arresting the Chairman of Morgan Crucible for actions in the UK that were in accordance with UK law; the latest is having a Chinese national arrested in Canada on… Read more »

Samarkand Tony
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Samarkand Tony

Malaysia’s PM is a Holocaust denier who quite openly says he believes ‘hook-nosed’ Jews run the world. Referring to Goldman Sachs as a code for ‘Jew bankers’ is a standard trope of antisemites.

So Malaysia are asking ‘the jooz’ for more money because they ‘stole’, no evidence needed because ‘Jew bankers’. This one really is as simple as Malaysia’s government actually believing that Goldman Sachs is run by Jews who know they’re stealing from everyone and who will therefore pay hush-money when they get caught.