Najib rubbishes claims 1MDB overpaid Goldman Sachs

(Malay Mail Online) – Prime Minister Datuk Seri Najib Razak has dismissed allegations that Goldman Sachs was overpaid through high interest rates to manage 1 Malaysia Development Berhad’s (1MDB) RM5 billion Islamic bonds.

In a written parliamentary reply to PKR’s Raub MP Datuk Mohd Ariff Sabri Abdul Aziz, Najib, who is also finance minister, said the US-based bank was chosen to manage 1MDB’s bonds as it is among the few in the US capable of handling such an enormous bond issuance.

“Concerns about the 5.7 per cent interest rate imposed upon the said Islamic bond in 2009, with the assumption that it is high, is baseless simply because the bonds were the first Islamic bonds issued in Malaysia which had a 30-year tenure,” said Najib.

Ariff had questioned Najib, who is also chairman of the state investment arm’s advisory board, on the criteria used to appoint Goldman Sachs to manage the RM5 billion Islamic bonds at a 5.75 per cent annual interest rate, compared with a Petronas bond that paid an interest rate of 3.6 per cent at a time when the bank was involved in the sub-prime loans scandal in the US.

The debt-ridden 1MDB is currently being investigated by the Auditor-General, the police, as well as the Parliamentary Public Accounts Committee.