Wong Chen: MoF must explain US$1.4b Goldman Sachs guarantee

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“These are the terms that we need to know. Without full disclosure for the above questions, Malaysians cannot properly assess the true value of the compensation.” — Wong

KUALA LUMPUR (July 27): Wong Chen (PH-Subang) is urging the Ministry of Finance (MoF) to explain Goldman Sachs' guarantee of a full recovery value of at least US$1.4 billion in assets that are traceable to the diverted proceeds from three bond issuances by the investment bank.

He questioned if the US$1.4 billion forms a portion of what the US government is in the process of recovering or whether this is a different amount.

"What time frame was given to Goldman Sachs to recover the same before they have to pay Malaysia the US$1.4 billion? Every guarantee has a time frame. 

"These are the terms that we need to know. Without full disclosure for the above questions, Malaysians cannot properly assess the true value of the compensation," said Wong during a press conference in Parliament.

He also urged Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz to disclose the legal implications for Goldman Sachs in terms of criminal liability, given that this is a criminal case.

The government should not allow persons directly involved in criminal activities to get away with just a financial penalty, he said, pointing out that most allegations made against the bank are criminal in nature.

"Lastly, I urge the PN (Perikatan Nasional) government to disclose their efforts in recovering money from Jho Low (fugitive businessman Low Taek Jho) and his associates. We have already seen Riza [Aziz] getting special treatment.

"What about the others?" said Wong.

Meanwhile, on the upcoming judgement in former prime minister Datuk Seri Najib Razak's RM42 million SRC International Sdn Bhd trial, he hopes that "justice will be done".

He said the mere fact that Goldman Sachs had decided to settle shows that there is a case, although he added that the Goldman Sachs settlement may not be directly linked to Najib.

"I hope the judiciary will do the right thing, not out of fear or favour. Most Malaysians are expecting a definitive ruling because this case is just ridiculous ... the whole world knows about this. We hope justice will be delivered," said Wong.

The MoF recently announced that Goldman Sachs had agreed to a US$3.9 billion settlement for Malaysia in relation to the 1Malaysia Development Bhd (1MDB) debacle, which is understood to be the biggest settlement for the country, and possibly the largest payout by the international investment bank.

The settlement will be split into a cash payment of US$2.5 billion and a guarantee of a full recovery value of at least US$1.4 billion in assets.

Goldman Sachs will also assist Malaysia in the recovery of other related assets abroad at its own cost as acknowledgement of misconduct of its former executives in the 1MDB scandal.

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