Extra RM2.4 billion for affordable home, good news? (Only if…)

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I agree with Finance Minister Lim Guan Eng fully on this one.Article in TheStar here. American investment bank Goldman Sachs should return the US$588mil (RM2.4bil) in it was paid for 1MDB-related matters. This RM2.4 billion fee was for the raising of bonds totalling US$6.5 billion (RM23.29 billion) 1MDB back in 2012 and 2013. He said, “They must pay us back this money, not only the US$588mil but much more than that.”  The reason is simple, Goldman Sachs has admitted the role of its officers in the dealing. Tim Leissner, a former partner for Goldman Sachs in Asia, had pleaded guilty to conspiracy to launder money and conspiracy to violate the Foreign Corrupt Practices Act, and agreed to forfeit US$43.7mil (RM181.8mil). Article for reference in TheStar here. 

It was revealed that Goldman Sachs generated about US$588mil (RM2.4bil) in fees for raising three bonds worth US$6.5bil (RM23.29bil) in 2012 and 2013. Goldman Sachs chief executive officer David Solomon told an interview with Bloomberg TV in Singapore recently that it was “distressing” to find two former Goldman Sachs bankers went around the bank’s policies and broke the law in their dealings with 1MDB. Here’s that article in TheStar for reference.  His words, “It is obviously very distressing to see two former Goldman Sachs employees went so blatantly around our policies and so blatantly broke the law.” Solomon was interviewed by Bloomberg TV in Singapore.

Assuming we have this RM2.4 billion back, it could be used for more affordable homes. Some portion could be added into the RM1 billion fund for borrowers earning less than RM2,300 too. Could they afford to pay? Well, for 2017, Goldman Sach’s net profit was US$4.29 (RM17.81) billion. This is the lowest in the last 4 years because in 2014, it earned US$8.48 (RM35.21) billion. Technically, they could afford it. This will go a long way to tell the world that they are serious in NOT repeating and many governments will now think highly of them for taking responsibility. Cheers to this request by Lim Guan Eng and looking forward to the response from the Goldman Sachs CEO. Happy following.

written on 8 Nov 2018

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