When Tengku Zafrul Tengku Abdul Aziz was appointed as finance minister by backdoor Prime Minister Muhyiddin Yassin in March, we unveiled that the former chief executive of Malaysian banking group CIMB was the same superstar singer in a “Hebat Negaraku” music video – a four-and-a-half-minute clip designed to worship and suck up to then-PM Najib Razak.
To make matters worse, Zafrul was reportedly linked to Muhyiddin’s family. Apparently, Zafrul’s younger brother, Tengku Zuhri Tengku Abdul Aziz, is married to Fara Nadia Abd Rahim, whose elder sister Fara Ikma Abd Rahim is married to Muhyiddin’s eldest son Fakhri Yassin. Hence, Muhyiddin has indirect influence and control over the national coffers.
Some simpletons asked a hilarious question – what’s wrong that Zafrul sang a song of praise for Najib, the same crook who has just been sentenced to 12 years in prison and fined RM210 million after he was found guilty of all seven charges of abuse of power, criminal breach of trust (CBT), and money laundering – involving RM42 million stolen from SRC International Sdn Bhd (a subsidiary of 1MDB)?
Even before the verdict last week, one can only feel sorry for the simpletons who still could not see the issue of appointing Zafrul as the finance minister. It’s not rocket science that as a CEO, he was paid to professionally and ethically run the bank, and not involved in activities like singing songs of praise for a prime minister, scandal-plagued or not.
Can you imagine Warren Buffett or Bill Gates doing the same drama to apple-polish Donald Trump’s MAGA (Make America Great Again) political campaign? The appointment of Zafrul as finance minister by the prime minister is no longer about cronyism or nepotism, but screams of astounding incompetence, gross weakness and inability to protect the national interest.
The backdoor Perikatan Nasional government’s US$3.9 billion settlement with Goldman Sachs over the American bank’s role in the theft of 1Malaysia Development Bhd (1MDB) funds is the clearest proof that the country has been short-changed due to Zafrul’s incompetence and lack of intelligence to strike a good deal at the negotiation table.
There was a reason why Goldman Sachs, the world’s most powerful investment bank, was known as the “Giant Vampire Squid of Capitalism”. The financial institution prospers by relentlessly jamming its blood funnel into anything that smells like money. Did Zafrul expect a greedy capitalist like Goldman Sachs would give him a good settlement deal?
Yes, Goldman Sachs had sucked the lifeblood from people of Malaysia by making the country poorer to the tune of RM50.75 billion in debt as a result of the 1MDB scandal. Would PM Muhyiddin Yassin, and Finance Minister Zafrul for that matter, dare deny the existence of such massive debt now that they are the government of the day?
It didn’t stop even after sucking billions of dollars. Now, the same vampire squid has made a fool of the lame-duck government. The best part is this –Zafrul, despite being stripped naked by Goldman Sachs, actually thinks he was brilliant for successfully squeezing more money from the American bank. That’s the problem when PM Muhyiddin sent a boy to do a man’s job.
At first, the pathetic Zafrul crowed non-stop about how the settlement amount was significantly higher than the US$1.75 billion (RM7.4 billion) offered under the Pakatan Harapan (PH) administration back in 2019. Which part of “Goldman Sachs offered US$1.75 billion, but rejected by the PH government” that the finance minister didn’t understand?
Goldman can even offer US$10 bucks just to test the water, or to insult the intelligence of the Malaysian government, but that doesn’t mean the government must foolishly accept it. The PH government did not demand for US$1.75 billion. So, why did Zafrul boastfully claim that he got a better deal, when in fact the previous PH government’s demand was higher at US$7.5 billion?
As revealed by former finance minister Lim Guan Eng, the initial demand of US$7.5 billion (RM31.79 billion) was derived from the total outstanding 1MDB debt guaranteed by the government, which stood at RM31.7 billion. Even if Goldman Sachs agrees to pay this amount (US$7.5 billion), the country will still make a huge loss because it didn’t take into account interest payments.
If the remaining interest payments (which run until 2038) are included, the debt would balloon to RM41.5 billion – an extra loss of close to RM10 billion that the taxpayers’ have to absorb. The interest payments alone are RM10 billion. Hence, the actual debt of 1MDB, if calculated until 2038, is RM50.4 billion (outstanding RM41.5 billion inclusive interests plus RM8.9 billion already paid by the government).
The US$3.9 billion settlement agreed and trumpeted by the idiot Zafrul, announced on July 24, 2020, included US$2.5 billion (RM10.6 billion) cash and a full recovery value of at least US$1.4 billion (RM5.9 billion) in proceeds from assets related to 1MDB seized by governmental authorities around the world – for a total amount of US$3.9 billion (RM16.5 billion).
Exactly how does the finance minister plan to pay RM41.5 billion debt with only RM16.5 billion? Perhaps the clueless and incompetent Muhyiddin government plans to raise taxes – even re-introduce the GST (goods and services tax) – to pay the deficit of RM25 billion. In essence, Goldman Sachs short-changed Malaysian government by RM25 billion.
In fact, the American bank was so happy with the settlement that its chief executive David Solomon immediately went into celebration mode – moonlighting as a dance party DJ – in the Hamptons, despite New York’s social distancing requirements. About 2,000 people showed up to the party, including socialites and financial professionals. Clearly, Goldman had outwitted the sucker – Zafrul and his team.
Zafrul was so dumb that former Attorney-General Tommy Thomas was forced to open his mouth to set the record straight after the finance ministry gave a half-baked cock-and-bull story in an interview with The Edge. Defending the deal, Zafrul keeps saying Goldman Sachs guarantees that Malaysia will receive US$1.4 billion in proceeds from assets over a period of five years.
To the gullible and ignorant supporters of the backdoor government, Zafrul looks like a genius. But he talked as if Goldman Sachs is the one doing all the heavy lifting of recovering and returning assets from all over the world to the government. In reality, Malaysia would have received the US$1.4 billion from the US Department of Justice anyway, even without Goldman’s guarantee.
It’s the US Justice Department – not Goldman Sachs – that is doing all the dirty work of confiscating and returning to Malaysia all the assets purchased with stolen money from 1MDB funds. Either the finance minister was clueless or was absolutely dimwit to suggest that it was a fantastic deal due to the guarantee from Goldman, as if the bank was doing a charity.
Besides, why wait for five years to get US$1.4 billion in assets when the “Giant Vampire Squid” could be pressured to cough up more cash immediately. According to Sarawak Report, the bank has actually reserved a whopping US$10 billion for the settlement. In fact, over the past two years, Fitch Ratings estimated that Goldman has set aside at least US$3 billion in legal reserves alone.
In his attempt to belittle the criminal charges initiated by former Attorney-General Thomas, the silly Zafrul argued that there is no imprisonment provision against a corporation. Of course, you can’t send a bank to jail. For the finance minister to make such remarks in the first place shows he was either seriously retarded, incredibly inexperienced, has been smoking horrible grass or all of the above.
Did Zafrul realise that Malaysia is the first country in the world to prosecute Goldman Sachs as a company, filing charges in December 2018 against Goldman Sachs (Asia) LLC, Goldman Sachs International (UK) and Goldman Sachs (Singapore)? What was the strategic reason when (former) A-G Tommy Thomas did that?
Did Zafrul also realise that in August 2019, Thomas has slapped separate charges against 17 current and former Goldman executives, whom it accuses of misleading investors by making false statements and omitting key facts in relation to the 1MDB-related bond issues worth US$6.5 billion. Again, what was the tactical reason for doing that?
Malaysia has a very strong case against all the accused. Under the leadership of Thomas, the Attorney General’s Chambers was confident that not only former Goldman executives would be sent to prison, but also all the Goldman Sachs companies would be ordered to pay compensation. But that was not the actual strategic and tactical reasons.
The strategic and tactical reasons were to create bargaining power and leverage for Malaysia, as revealed by Thomas. Every layman can tell you that the bargaining power can only be created by starting a lawsuit and create maximum negative publicity against Goldman. However, Thomas was not crying wolf and certainly was not bluffing in this poker game.
Perhaps the clueless Muhyiddin government was unaware that Goldman was already in talks with the US Justice Department to plead guilty to US bribery laws and to pay a fine of US$2 billion amid allegations that at least one of its bankers was aware that flamboyant Malaysian financier Jho Low – whom Goldman had declined several times as a client – was involved in the 1MDB bond deals.
A-G Tommy Thomas was leveraging on the fact that the Goldman Sachs’ banker, Tim Leissner, who is married to Kimora Lee Simons, has pleaded guilty in the 1MDB scandal, even though Goldman was expected to throw its former employees under the bus by maintaining that its senior management was unaware of criminal activity undertaken by certain “rogue” employees.
More importantly, Goldman could not afford to play the poker game with Malaysia. The sign of desperation was on the wall when the bank appealed to its highest ranks, with Attorney-General William Barr overseeing the case personally. Goldman desperately wanted to reach a settlement before November’s presidential election, which could see the defeat of Donald Trump.
If Trump loses and Goldman failed to reach a settlement, Goldman Sachs has to start the process all over again with a new administration – the Democrats – that may be less friendly to Wall Street crooks like Goldman. Last month, the bank reported US$2.42 billion in net profit, or US$6.26 a share, crushing the US$3.78 a share estimate of analysts. Its revenue alone was US$13.3 billion.
Paying US$2.5 billion cash to Malaysia was like losing one-quarter of profit – a small price to pay in exchange for dropping all criminal charges against the bank. Do you know how much Goldman would lose – in terms of credibility, monetary and reputation – if the bank is charged and the case drags for years? Dragging Goldman to the court is the best leverage to pressure the bank for a maximum pay-out.
American TV courtroom drama series has shown how guilty corporations would request for a settlement in the middle of a trial. In the case of 1MDB scandal, Goldman was already losing half the battle with Tim Leissner’s admission of guilt and the bank’s readiness to pay US$2 billion fines. Idiots like Finance Minister Zafrul and Attorney-General Idrus Harun destroyed everything with a rushed and premature settlement.
All the hard work of the previous Pakatan Harapan government has gone to waste because Muhyiddin’s incompetent minions failed to use any leverage at the negotiation table. The inexperienced Zafrul was easy meat to the American bank. – Finance Twitter