Yesterday’s PR crisis overdrive from Goldman Sachs, complete with a groveling apology from CEO (DJ!) David Solomon and ad hominem accusations lauded at their disgraced former Asia bigwig, Tim Leissner, may be well and dandy, but according to Malaysian Finance Minister, Lim Guan Eng, a “sorry” will not do. Not when a missing US$7.5billion (RM30.8billion) from 1MDB accounts are at stake.
If Goldman wants Malaysia to drop their charges, the global bankers must put their money where their mouth is: “RM7.5bil…we can discuss lah,” said the loose-lipped minister.
Just what this means to the banking powerhouse is evident in the both the magnitude and intensity of culpability on the shoulders of Mr Leissner: Goldman is very worried they will be footing the bill for his criminal indiscretions.
On Wednesday, Solomon faced industry analysts, addressing the 1MDB-shaped elephant in the room:
“For Leissner’s role in that fraud, we apologize to the Malaysian people,” the CEO said. “As you would expect, we have looked back and continue to look back to see if there is anything that we as a firm could have done better.”
A half-hearted apology wrought over by legal experts, phrased so as to limit as much blame as possible, but to paraphrase a detailed New York Times report on the matter — make no mistake — Goldman are shaking in their hand-stitched calf leather, wingtip shoes. So much so that they have set aside a whopping US$516 million in potential legal fees and regulator penalties; which sounds like a lot until you remember they profited US$600 million from the sale of 1MDB bonds, and that at the very least — the bank is being investigated for being on the hook for a missing cool US$2.7 billion.
Smearing their former partner, a man who for years exercised his want and will throughout Asia, seems to be the bank’s Hail Mary pass as their fate of fault looms in the near future. A PowerPoint slide show shared among senior partners lauds serious — and as of yet, unproven — accusations: Leissner was a serial womanizer, one who was married to more than one person at a given time, and also (randomly), a guy who converted to Islam not once, but twice, just so he could woo wealthy Muslim ladies that he encountered along the way.
Leissner has plead guilty to charges in a United States court, and is set to be sentenced in June — one can’t help but wonder if the bank is working overtime to drag an already tarnished Leissner so that any cooperation with authorities on uncovering the more unseemly side of Goldman’s global deal-making would be compromised by his general integrity.
Not a bad game plan, guys — but you’re forgetting one thing — Lim Guan Eng doesn’t really care WHO took the money, he’s most concerned with getting it back. “Sorry, but it was his fault,” won’t cut it.
“That apology … is, of course, insufficient. Necessary but not sufficient,” Lim said, adding that only when reparations and compensations were paid would the situation be sufficiently remedied.
