Ex-Goldman Sachs banker Roger Ng arrives for his criminal trial, at the United States Courthouse in Brooklyn, New York February 22, 2022. — Reuters pic
KUALA LUMPUR, March 16 — Goldman Sachs had been warned against doing business with Low Taek Jho — or Jho Low as he is popularly known — by its own internal legal and intelligence adviser, a US court on the 1MDB scandal heard.
Former British intelligence officer Stephen O’Flaherty, who was co-head of Goldman’s Business Intelligence Group, had flagged the flamboyant Malaysian as having questionable finances and gave the warning to the US investment bank’s Asian executives Tim Leissner and Roger Ng, who were in charge of the 1MDB account at that time, Bloomberg reported today.
O’Flaherty, who was reported to have 30 years’ experience in the British intelligence corps, told the US court that he recommended Goldman not accept Low as a client after a due diligence review, just before the first 1MDB bond was issued.
He asked both Leissner and Ng if Low was involved after hearing that the three had a meeting with Sheikh Mansour Bin Zayed al Nahyan, the chairman of Abu Dhabi’s sovereign wealth fund International Petroleum Investment Co in the United Arab Emirates capital city.
According to O’ Flaherty, Leissner answered in the negative.
“He seemed to be irritated with me,” O’Flaherty was quoted telling the US court.
“Leissner was saying Low was not present.
“We would not be comfortable working with Jho Low. We would not have Jho Low as a client of the firm, but if Jho Low was a small part of a deal, it would be difficult to say to the client he could not be part of it,” he added.
O’Flaherty was testifying for the prosecution in the US trial of Ng, the former head of investment banking in Goldman’s Malaysian operations, who is charged with conspiring to bribe foreign officials to win business for the US investment bank, which is in violation of US corruption laws.
Ng, 49, is the only former Goldman executive to be charged over the 1MDB scandal to date.
Leissner, who was Ng’s boss, pled guilty in 2018 to conspiring to launder money and violate an anti-bribery law, and agreed to cooperate with US prosecutors.
O’Flaherty told the US court in New York that he was sceptical of Leissner’s denial that Low would not be a Goldman client.
“…it’s important that we have no role on our side for Low, and asked that any payment to intermediaries are declared. I was trying to get reassurance that Low was not involved,” he was quoted saying.
The misappropriation of funds from 1MDB is regarded as one of the biggest financial scandals.
Between 2009 and 2014, Goldman reaped some US$600 million (RM2.5 billion) in fees for helping 1MDB sell US$6.5 billion in bonds, but around US$4.5 billion of that was diverted.
US prosecutors are reported to have said that Goldman bankers bribed officials to win business for the bank.
In 2020, Goldman paid a nearly US$3 billion fine and arranged for its Malaysian unit to plead guilty in US court.
Former prime minister Datuk Seri Najib Razak, who was also the finance minister who directly supervised 1MDB, is on trial in Malaysia for a slew of criminal and corruption charges involving the sovereign investment firm.