Why accept Goldman’s US$2.5 bil instead of US$7.5 bil

DAP secretary-general and Bagan MP Lim Guan Eng today questioned the move by Putrajaya to accept Goldman Sachs’ US$2.5 bil (RM10.66 billion) settlement for its involvement in the 1Malaysia Development Bhd (1MDB) scandal, although Malaysia has a claim of US$7.5 bil.

The latest settlement announced by Prime Minister Muhyiddin Yassin on Friday also included another US$1.4 bil from the recovery of stolen assets illicitly paid by 1MDB through the US Department of Justice.

“Is he (PM) letting Goldman Sachs off too lightly when we (previous PH government) had asked for US$7.5 bil for the banking firm’s involvement in 1MDB? The prime minister should assure the public that he has not sold Malaysians short.

“Two of their senior executives have been charged by the US authorities and the Malaysian government has filed 17 criminal charges against Goldman Sachs,” said Lim.

The previous Pakatan Harapan (PH) government had claimed US$7.5 bil to recover US$6.5 bil in three 10-year bonds arranged by Goldman Sachs guaranteed by the Malaysian. It included an additional US$1 bil to cover interest cost incurred.

Here are the bond packages according to Lim:

  1. US$1.75 bil at 5.99% interest rate issued on May 18, 2012
  2. US$1.75 bil at 5.75% interest rate issued on Oct 17, 2012
  3. US$3 bil at 4.4% interest rate issued on March 16, 2013

“If Goldman Sachs is willing to recover the remaining US$4 bil in stolen assets, the Malaysian government can be justified for settling for US$6.5 bil, and forgoing the additional US$1 bil of claims in interest servicing cost on our part,” he said.

He added the total 1MDB debt outstanding guaranteed by the government is at RM31.7 bil.

“If the remaining interest payments until 2038 are included, the amount will increase to RM41.5 bil. This sum excludes the RM8.9 bil that has already been paid by the government.

“This will bring the total cost to the country, including 1MDB’s debt interest, to RM50.4 bil.”

FOCUS MALAYSIA

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