Goldman Sachs, a ‘Nama letter’ and the links to a $6bn fraud probe

Simon Rowe
Irish Independent

When a Wall Street star left under a cloud, the ‘smoking gun’ was a letter destined for our bad bank

A senior ex-Goldman Sachs banker who quit the Wall Street firm after being investigated over a falsified assurance letter – which, it is believed, he had sent to a European bank to assist a Malaysian tycoon’s bid to purchase property from Nama – has become embroiled in a $6bn global embezzlement probe.

Tim Leissner, who had close ties to the Malaysian sovereign wealth fund 1MDB and was considered Goldman Sach’s point man in Singapore dealing with the fund, was interviewed on January 19 this year in relation to “inaccurate and unauthorised statements” made by him in a June 2015 reference letter.

According to filings with the Financial Industry Regulatory Authority, the US securities industry’s self-regulating body, the letter was written without Goldman Sach’s knowledge or approval.

Sources close to the case said Leissner’s letter had included details about the finances of his client, who is believed to be well-known Malaysian tycoon Jho Low, while overstating the extent to which Goldman Sachs had done due diligence on him.

The letter, which vouched for Low and his finances to a financial institution in Europe, was to be used to help Low reach a deal to buy real estate from the National Asset Management Agency, it is believed.

A day after Goldman Sachs quizzed Leissner over the unauthorised assurance letter, he tendered his resignation with immediate effect. It is not clear if Low progressed any deal with Nama on foot of the letter.

Based in Singapore, Leissner had been a chief advisor to the state investment fund 1Malaysia Development Berhad, or 1MDB, that netted Goldman Sachs hundreds of millions of dollars in commissions for bond sales. The investment bank earned an estimated $593m in commissions and expenses from three bond sales totalling about $6.5bn since 2009.

The fund is one of the biggest investment groups in the world, with advisers including French billionaire Bernard Arnault.

Goldman has severed ties with the controversial fund that is now the subject of a $6bn international embezzlement investigation covering five countries including France, Switzerland and the UK, and allegations that $681m was routed to private bank accounts owned by Malaysia’s Prime Minister Najib Razak.

Mr Razak has denied accusations of corruption, which have dogged his government for months. US investigators probing the troubled Malaysian state investment fund have subpoenaed Leissner, Goldman Sachs’ former chairman for Southeast Asia. He denies any wrongdoing.

1MDB has said all its investments are accounted and that it would co-operate with any investigations.

Goldman Sachs hasn’t been accused of any wrongdoing.

Billionaire tycoon Jho Low, who helped set up 1MDB, has strongly denied that he benefited from alleged improprieties linked to the fund.

Low is well-known in Irish property circles after his Wynton Group firm became embroiled in the bitter and highly public boardroom battle that broke out between Paddy McKillen and the Barclay Brothers for control of the landmark Claridge’s, Connaught and Berkeley hotels in London.

The Malaysian-based investor, with backing from 1MDB, approached Nama over buying Derek Quinlan’s loans.

According to court filings in the subsequent court action between McKillen and the Barclays, Low “acquired a debt due from Mr Quinlan to Nama in April 2011 which was secured on part of Mr Quinlan’s shareholding in the company, bidding more for the debt than the Barclay interests were prepared to pay. The debt was acquired through an associate company called JQ2”.

A letter from Wynton Group to shareholders in the hotel group in January 2011 stated that financing for the offer had “in principle been fully underwritten by Malaysian government-backed investment funds”.

However, media reports at the time stated that Nama was initially reluctant to engage with 1MDB despite the size of its coffers.

  1. #1 by Justice Ipsofacto on Friday, 24 June 2016 - 2:07 pm

    Brexit. Official. Britain is out.
    Australia just made an announcement concerning the impact of brexit on australia. Basically, not much.
    What about the impact on malaysia?
    Any effects on us?

  2. #2 by SuperString on Friday, 24 June 2016 - 8:14 pm

    David Cameron promised to hold a Referendum to let the people decide to remain or leave EU, he kept him promise. David Cameron took on the responsibility of the fiasco caused by his Brexit by RESIGNING. This is the kind of Prime Minister that we would die to have!!!

  3. #3 by Bigjoe on Saturday, 25 June 2016 - 5:43 am

    The truth? It’s not that relevant. If DAP believe the country is on the road to destruction with Hudud and broken institution, then the only logical choice is to make a deal with Najib.

    PAS will have a disastrous outing in the coming GE but so will PH. Then, Najib has a choice to continue is path of prodigality with the nation’s fundamentals or with his strong mandate, turn things back completely. Turning back is too risky unless DAP becomes his partner.

    So only choice is DAP must forgive Najib’s financial prodigality in return for restoring systematic soundness, to walk away from systematic prodigality. It’s difficult to imagine, to do but it appear to be the only logical choice for save Malaysia.

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