Friday 10 July 2020 ,
Friday 10 July 2020 ,
Latest News
  • Covid-19: Bangladesh reports 37 more deaths, 2,949 new cases
  • Experts fear spike in Corona infections after Eid-ul Azha
  • Myanmar urged to ensure voting rights, restore citizenship rights for Rohingya
  • Buriganga launch capsize: ‘Mayur-2’ launch owner arrested
  • US-Bangla brings bank 159 Bangladeshi nationals from Doha
  • Global death toll from coronavirus reaches 554,304
  • Coronavirus Hotline Numbers: 01944333222, 16263, 333; website: www.corona.gov.bd
10 February, 2019 00:00 00 AM / LAST MODIFIED: 9 February, 2019 11:17:40 PM
Print

Humbled Goldman Sachs still faces questions on 1MDB

AFP, New York
Humbled Goldman Sachs still faces questions on 1MDB
Executives at Goldman Sachs headquarters face questions over the firm's work for scandal-ridden Malaysian fund 1MDB. AFP Photo

oldman Sachs’s decision to potentially cut bonuses for top executives over the 1MDB scandal reflects an acknowledgement at shareholder and public outrage over the debacle.

The prestigious investment bank announced last week that it could withhold millions of dollars in bonuses to former Chief Executive Lloyd Blankfein and two other retired executives depending on the outcome of ongoing probes into the Malaysian fund.

The bonuses were first approved in 2011 and the annual payouts depend on the firm’s performance over the ensuing eight years. In Blankfein’s case, the bonus began at $7 million and nearly doubled, according to US securities documents.

Beyond the bonuses, Goldman also said it could claw back compensation from current chief executive David Solomon and two other current senior executives, president John Waldron and chief financial officer Stephen Scherr.

Solomon was paid $23 million last year, including $15.4 million in stock options.

The announcement on bonuses was intended as a message for shareholders who are upset at how the corruption scandal has tarred the bank’s image at a time when it is working to build up its consumer banking business through the online platform Marcus, according to two people familiar with the matter.

The board of directors wants shareholders to know it is not blind to the gravity of the situation, said one of the sources, adding that the message was not meant to be an admission of wrongdoing.

Besides Solomon, who also serves as chairman, Goldman’s 13-member

board includes ArcelorMittal chief executive Lakshmi Mittal.

Experts say Goldman Sachs could face a fine of perhaps $2 billion under a criminal case related to 1MDB.

In January, Solomon apologized to Malaysia over the scandal and the involvement of former Goldman partner Tim Leissner, who had pleaded guilty to violating US anti-bribery and money laundering laws.

Solomon’s statement stood out in tone from that of Blankfein, who said during the height of the financial crisis in 2009 that he was “doing God’s work” in helping companies raise capital.

US authorities have accused a Malaysian financial intermediary, Low Taek Jho, along with Leissner and another former Goldman banker, Ng Chong Hwa, of conspiring to launder billions of dollars from 1 Malaysia Development Berhad, a sovereign wealth fund set up for development of the country. Goldman garnered $600 million in fees and revenues from 1MDB bond transactions.

US officials maintain that more than $2.7 billion in funds went to kickbacks and bribes.

Pointed questions facing Goldman Sachs include revelations it proceeded with its first transaction with 1MDB to finance a $1.75 billion purchase of power plants despite being warned by rival bank Lazard that the deal looked suspicious, according to a source.

Also, a division of the investment bank agreed to do business with Low Taek Jho even though he was rejected in 2011 from opening an account because bank officials could not determine the source of his wealth, a person familiar with the matter told AFP.

“The due diligence functions at Goldman Sachs fell apart,” said Richard Bove, analyst at Odeon Capital and a frequent Goldman critic.

“If you’re going to raise $6 billion for someone you better know everything there is to know about that someone.”

The three transactions were presented to the bank’s investment committees for Asia and firm-wide, which required 1MDB to pay a larger-than-usual fee because 1MDB was opposed to a syndicated loan, saddling Goldman with all of the risk, a source said.

Goldman declined comment and Lazard did not respond requests for comment.

 

Comments

Most Viewed
Digital Edition
Archive
SunMonTueWedThuFri Sat
01020304
05060708091011
12131415161718
19202122232425
262728293031
More Business stories
Bangladesh Railway losing Tk 4-5cr every day Bangladesh Railway is losing Tk 4-5 crore in revenue every day following the suspension of all train services across the country amid the coronavirus outbreak. On March 24, the government suspended all…

Copyright © All right reserved.

Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Disclaimer & Privacy Policy
....................................................
About Us
....................................................
Contact Us
....................................................
Advertisement
....................................................
Subscription

Powered by : Frog Hosting