KUALA LUMPUR: New York-based Goldman Sachs own probe of its involvement with 1MDB, according to people familiar with the investment bank’s process, found no evidence of wrongdoing, Bloomberg News has reported. Tim Leissner, Goldman’s Southeast Asia chairman who worked on the 1MDB deal, apparently quit the bank after he was told in January to go on leave over a separate matter in Indonesia which had earlier been aborted. He had been with the firm for 18 years. Goldman was in fact re-examining its involvement with 1MDB when it found that Leissner had used its (Goldman’s) letterhead to write a reference letter for the Indonesian deal in violation of Financial Industry Regulatory Authority rules. Leissner was issued a subpoena in February by the US Justice Department which is probing alleged wrongdoing at 1MDB. Goldman is cooperating with the probe although Leissner, Bloomberg found, has been told by the Justice Department that they are not investigating him as well on 1MDB. Investigators in Switzerland and the US, besides Malaysia, have been following the money trail left by 1MDB. Leissner exercised oversight on three bond sales that raised USD6.5 billion for 1MDB. Goldman has since come under fire from various quarters for collecting above average commissions. However, it has defended the commissions as representing market conditions at the time and the underwriting risks it had to take. Leissner hasn’t commented so far on the allegation that he wrote an unauthorised reference letter for the Indonesian deal. Bloomberg couldn’t get through to his lawyer, Jonathan Cogan of Kobre & Kim. They didn’t return phone calls. Goldman Sachs in Hong Kong refused to comment, said Bloomberg. Sudjiono Timan, the man who wanted a controlling interest in Newmont Mining Corp.’s copper mine in Indonesia, could not be reached even through former business associates. Goldman ended the Indonesian deal after an in-house review found that although Timan withdrew as an investor in Newmont, he remained as Adviser to a group of people on the deal. Timan, who once headed government-owned brokerage holding company PT Bahana Pembinaan Usaha Indonesia, was sentenced to 15 years and fined USD98 million in compensation payments after the Court found that he approved loans to companies which led to losses for the government. Timan has an overturned corruption conviction dating back to 2004. The Supreme Court of Indonesia overturned the corruption conviction in July 2013 before the proposed Newmont deal.
Goldman Sachs has said that it found no evidence of wrongdoing through its own internal probe into its involvement with 1MDB, adding that Jonathan Cogan, who had worked on the 1MDB deal, had actually quit on a separate matter in Indonesia. The bank were in the midst of their 1MDB investigation when it found that Leissner had used the bank's letterhead to write a reference letter for an Indonesian deal in violation of Financial Industry Regulatory Authority rules. Investigators in the US, Malaysia and Switzerland continue to follow the money trail left by 1MDB.