JUST for the RECORD, from asiasentinel.com, BELATEDLY, But DESi believes it's better -- or badder? -- late than never:(
~~ YL, Desi, awol on fiction writHing, so NO COMMENTARY
Goldman’s Role in the 1MDB Controversy
Why did the US investment bank harvest such astonishing fees?
Goldman Sachs must be foremost among foreigners praying that the 1MDB scandal doesn’t topple the Najib government.
The full scale
inquiry by agencies ranging from Bank Negara to the Anti-Corruption
Commission would surely unearth so much that was rotten in the state of
Malaysia and might well give the guarantor of its huge debts (the people
of Malaysia) the opportunity to renege on the grounds of claims made at the time of the debt issuance.
Even if this
were not to be the case, there is every reason why Goldman should be
made to throw up the huge profit it made on raising money for what it
must have been able to smell was a dubious deal. But Goldman avarice
ensures that any sense of smell is extinguished as soon as its eyes see
the potential for huge rewards by being party to a deal which yields the
sort of commission only available on dodgy transactions.
As has been
pointed out elsewhere, Goldman collected a commission of 7.69% in
raising US$6.5 billion for 1MDB, a supposedly quasi- sovereign borrower.
Why would such a company be willing to pay so much over the odds, in
the process netting Goldman fees which are believed to have totalled
US$500 million?
Now the
Malaysian government is on the hook for probably about US$4 billion of
guarantees. A new administration might well decide to contest this
liability given the circumstances of its issuance and Goldman’s role.
Goldman asked no
questions because it must have known that something irregular was up.
But in the amoral world of top level investment banking, who cares about
truth or conduct when millions can be collected, no questions asked? Of
course to ordinary companies and people whose loan requests are subject
to intense bank scrutiny, Wall Street’s finest feel no need so long as
they can collect mega fees and pass the parcel whether to global bond
buyers or the Malaysian public.
The latter are
now expected to stand behind this worst of all examples of the nexus
between UMNO, banks and corruption – exceeding even the Bank
Bumiputra-Carrian affair of the 1980s, in which Bank Bumi
lost US$1 billion in what was then the world’s biggest scandal, and
vastly larger than the string of similar scandals – Perwaja Steel, MAS
etc etc. A full investigation of 1MDB could well show a large case for
Goldman to answer as to why the guarantee may be null and void.
But what is
perhaps most remarkable is that despite a string of dubious
deals—including a role in the Greek crisis by earlier helping Greece
raise money on the basis of manipulated debt data – Goldman is still
regarded as a respectable institution. That is a commentary on the
current state of western financial so-called capitalism.
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