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Najib says Goldman, lawyers, auditors share blame on 1MDB mess

The former Prime Minister added that businessman Jho Low cheated the country out of billions.


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Updated: November 23, 2018

Former Malaysian prime minister Najib Razak does not reject the possibility that fugitive businessman Low Taek Jho had cheated the government in its dealings over state fund 1MDB, and blamed investment bank Goldman Sachs, lawyers and auditors for failing to protect the country’s interests.

In an interview with Sinar Harian, a Bahasa Malaysia daily, Najib was asked whether he ever saw, from an early stage, the possibility that Low would cause the country to lose billions of ringgit.

“Action must be taken if it’s clear that he committed an offence,” Najib answered in the interview published on Thursday (Nov 22). “At that time we had appointed lawyers, auditors and Goldman Sachs, a renowned global investment bank.

While serving as prime minister between 2009 and May 2018, Najib was concurrently Malaysia’s finance minister.

He was also chairman of the advisory board of 1MDB, a state development fund parked under his finance ministry.

1MDB was set up in 2009 soon after Najib became prime minister, with the 1MDB board disbanded in May 2016 after the scandal attracted investigations from around the world.

The state fund was saddled with huge debts from purchases of assets such as power plants, and raised eyebrows when it paid Goldman huge fees to sell its bonds.

Meanwhile, an Abu Dhabi sovereign wealth fundon Wednesday (Nov 21) has sued Goldman for allegedly conspiring against the Middle Eastern fund to further a criminal scheme by 1MDB.

The suit, filed in a New York court on behalf of Abu Dhabi’s International Petroleum Investment Company, names Goldman as well as former Goldman officials who were charged by the US Justice Department in indictments unsealed earlier this month.

Najib in the Sinar Harian interview said Goldman, and lawyers and auditors linked to 1MDB’s deals should have informed the government that “something was not right”.

“They clearly failed in carrying out their responsibilities, for example Goldman Sachs. It’s proven. The system we created to protect our interests – investment banks, auditors, lawyers and all, they have not played their true role,” said Najib.

The former premier has pleaded not guilty to 25 charges in Malaysia’s court related to abuse of power and money laundering over hundreds of millions of dollars of funds received in his personal bank account.

The charges include four counts of abuse of power involving RM2.3 billion (S$760 million) of 1MDB monies.

The United States Department of Justice has said US$4.5 billion (S$6.2 billion) of 1MDB funds were siphoned by top Malaysian officials and their associates.

Goldman has been under scrutiny for years over its role in raising money for 1MDB and for the fees it earned – about US$600 million.

Najib in the interview, when asked whether this meant that he now admits that Malaysia had been cheated by Low, replied: “Yes, that is the conclusion if we take into account what we know today, then that is the truth”.

His comments appeared to contradict what he had said in Parliament in March 2015.

Najib had then, in a written reply to a question from an MP, said Low had no involvement with 1MDB and that all decisions and transactions were made by the company’s management and board of directors, which he chaired.

“Low Taek Jho has never worked in 1MDB, and all decisions and transactions are made by the company’s management and board of directors,” Najib had said.



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