This article first appeared in The Edge Malaysia Weekly on March 14, 2022 - March 20, 2022

EX-Goldman Sachs executive Tim Leissner testified in a US court last week that he and others received US$28 million from Genting Power Holdings Ltd in 2012. On the instruction of Low Taek Jho (Jho Low), a portion of that money, amounting to US$14 million, was then transferred to a member of the Lim family, which controls Genting, for his assistance in the sale of a power plant to 1MDB.

According to a court transcript obtained by The Edge, Leissner, a star witness in the trial of his former subordinate at the bank, Roger Ng Chong Hwa, confirmed that he had received US$28 million from Genting Power around October to November 2012.

Under cross-examination by Ng’s lawyer, Marc Agnifilo, Leissner was asked about a bank account under World Merit Management, an account his ex-wife Judy Chan had opened in Hong Kong to channel various payments Leissner made from 1MDB. This same account was also used by Leissner to transfer in and transfer out kickbacks to certain individuals and companies when requested by fugitive financier Jho Low.

Leissner recalled receiving money from Genting Power into the World Merit account. Genting Power is incorporated in the Isle of Man.“It was my understanding from the discussions I was having at that time that a portion of that money was to be paid to (name withheld by The Edge) for having essentially, worked and helped to sell those assets, Genting Power assets, to 1MDB,” he told the court.

Leissner was also shown a sham contract between World Merit Management and Vielle International, which was made to paper over the transaction between the two companies to enable the money to be paid to the Lim family member.

The ex-banker admitted that the two companies had no legitimate business dealings with each other and that someone linked to the Lim family was the person who worked out how the payment was to be made.

“There certainly was a payment from World Merit to (Lim family member) through a company. I don’t recall Vielle, but the numbers look like that’s the payment to him, yes,” he said about the RM45 million transfer.

Agnifilo then showed Leissner a document that showed that US$14.1 million (RM45 million) was transferred to Vielle. Leissner said: “I don’t remember it being Vielle, but I believe this number was paid to (Lim family member).”

(The Edge contacted Genting Bhd, the holding company of Genting Power, for a response to Leissner’s testimony but did not receive any by press time. We have also withheld the names of the family member and the intermediary until we are able to contact them for a response.)

The payment to the Lim family member was under “Project Maximus” — a name Leissner said was coined by Low and his cohorts for ultra-lucrative projects undertaken by Goldman for 1MDB. Under Project Maximus, the US bank helped 1MDB undertake a second bond offering to raise US$1.75 billion to part-finance its acquisition of Genting Sanyen, an independent power producer (IPP) owned by the Genting group.

Goldman made US$200 million in fees from the deal.

Leissner said the Lim family member was paid for his role in “essentially unlocking those assets from the Genting Group”.

In order to get around the banking system when effecting the transfers for the transaction, Leissner had his ex-wife Chan sign a document stating that the relationship of Vielle to World Merit was that of an independent contractor.

Leissner agreed to Agnifilo’s summation that the reason this was done was to allay any suspicion from the banks on such a big transfer.

“Now, just so we understand, the reason that this agreement between World Merit and Vielle was created is so that if a bank asks questions as to why this large transaction was being done, there would be an explanation, correct?”

Leissner answered in the affirmative.

The ex-banker also said that Lim’s intermediary, whom he described as “an Indian gentleman”, designed the plan for the transfer of the funds.

“It wasn’t my idea. I believe this idea came from Jho. And it was particular to (the Lim family member). It was created or designed by this person, this intermediary that appeared on behalf of Mr Lim ... who was like his personal adviser,” he said.

In August 2012, 1MDB paid RM2.3 billion (US$800 million then) to buy the power plant from Genting group, although the money raised via the bond was more than double that at US$1.75 billion.

In a Cover Story in the Issue of February 17-24, 2014, The Edge said that 1MDB had overpaid Genting because the internal rate of return (IRR) it would get from the purchase of the power plant was a mere 0.5%. This was far lower than the IRR of 5.2% it would get from the purchase of several power plants from tycoon Ananda Krishnan, which was done several months earlier for RM8.25 billion.

The Edge analysis was that, put together, the two purchases for a total of RM10.55 billion would generate an IRR of only 4% compared with the industry standard of at least 10%.

1MDB responded to the article by denying it overpaid.

After failing to list the power assets on the stock exchange, 1MDB sold all the power plants parked under Edra Global Energy Bhd for RM10 billion to China Nuclear Power Corp in November 2015.

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