Goldman Chases Ex-HK Bankers For Millions Over 1MDB

Goldman Sachs has announced that it will seek to claw back US$174 billion from current and former bankers over their role in Malaysia's 1MDB scandal, with two former Hong Kong-based executives among those facing big claims.

The news emerged after Hong Kong's Securities and Futures Commission issued its biggest ever fine to the bank's Asia division, ordering it to hand over HK$2.7 billion for its dealings with Malaysia's sovereign wealth fund. Hours later, Goldman agreed to pay US$2.9 billion in penalties to settle criminal charges in the United States.

In a statement, the bank's CEO, David Solomon, said "it is abundantly clear that certain former employees broke the law, lied to our colleagues and circumvented firm controls," adding, "we recognise that we did not adequately address red flags".

Solomon and three other current executives are to have their compensation for this year reduced by US$31 million this year, the statement said.

The bank will also seek US$67 million in bonuses from five former executives, including the previous CEO, Lloyd Blankfein. It said one former executive had voluntarily agreed to return most of the bonus payment and another was in talks to do so.

However the biggest sums are being sought from three Asia-based bankers it says were "implicated in the criminal scheme". They include Tim Leissner, a former Southeast Asia chairman who has been banned from the industry in Hong Kong and the United States for life.

Andrea Vella, a Hong Kong-based former co-head of investment banking in Asia who was banned from the industry by US regulators earlier this year, is also among the three being pursued, along with its former Malaysian investment banking chief, Roger Ng.

Goldman says it's seeking US$76 million from the three, of which it already holds US$24 million.

Leissner has pleaded guilty to criminal charges in the United States, while Ng is awaiting trial. Vella, who accepted his ban in the United States, has never faced criminal charges. His lawyers said at the time that he accepted the ban in order to move on in his career and avoid years of litigation.

A Malaysian financier charged in the US over the scandal, Jho Low, remains at large.

Goldman Sachs helped raise US$6.5 billion for 1MDB, and the US Justice Department has said more than US$4.5 billion was stolen by high-level officials at the fund and their associates between 2009 and 2015.

The affair helped bring down the former Malaysian leader, Najib Razak. (RTHK/AFP)

______________________________