After helping 1MDB, Goldman Sachs lands zero clients in Malaysia
Published: 16 July 2015 10:25 AM
Goldman Sachs is finding it hard to win new clients in Malaysia because of its association with 1MDB. – Reuters pic, July 16, 2015.
In 2013, Goldman helped to arrange a US$3 billion (RM11 billion) bond for 1MDB and was paid almost US$300 million for its role in the deal.
Since then, fees from work in the country have slumped, according to a Financial Times analysis of data from Dealogic.
The report said Goldman's involvement was in the spotlight because of the proximity of the 2013 bond issuance to alleged payments of almost US$700 million from companies linked to 1MDB to Prime Minister Datuk Seri Najib Razak, just weeks before the 13th general election.
One rival banker told AFR the shunning of the investment bank was unofficial, but added: "if you're a Malaysian corporate, you're not going to use Goldman because you don't want this association."
This is a setback for Goldman as its Southeast Asia chairman, Tim Leissner, had made it the only Western investment bank in the country's top 10 fee-earners in each of the six years from 2008 to 2013.
AFR highlighted that since that year, though, when it ranked seventh, Goldman slid to 23rd in 2014. It does not yet appear in Dealogic's fee calculations for 2015.
The bank has not done a public deal in the stock or bond markets since 2013, said the report.
"Malaysia has and continues to be an important part of our Asian business," a spokesman for the bank was quoted as saying. We have a very positive dialogue with Malaysian clients and an active deal pipeline."
Currently, 1MDB is under investigations by several parties, including Parliament’s Public Accounts Committee (PAC) and a special task force comprising the Attorney-General (A-G), Bank Negara, the police and the Malaysian Anti-Corruption Commission.
1MDB is mired in controversial deals, such as overpaying for power asset purchases and buying land cheaply from the federal government.
More recently, it has been linked to an election funding scandal, where other companies linked to 1MDB had allegedly funnelled billions of ringgit into Najib's personal bank accounts.
As authorities probe into these allegations, Najib has denied taking 1MDB money for personal use.
An audit will also examine a controversial joint venture with PetroSaudi International and the process of 1MDB's formation as a company.
The final audit, which will include examinations of 1MDB's real estate and energy arms, is due at year-end. – July 16, 2015.
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