KUALA LUMPUR – Bankers from Goldman Sachs Group Inc were warned not to do business with fugitive Malaysian financier Low Taek Jho, better known as Jho Low, according to a senior legal executive with the investment firm.
Bloomberg reported that Stephen O’Flaherty told the jury during the trial of former Goldman banker Roger Ng yesterday that none of the bankers involved with the 1Malaysia Development Bhd (1MDB) deal including Ng and former senior banker Tim Leissner had disclosed Low’s involvement in it.
O’Flaherty, who was previously an officer with British intelligence for 30 years prior to his stint in Goldman, said the bank rejected Low as a private wealth client following a diligence review by his team due to his questionable finances.
“We would not be comfortable working with Jho Low.
“We would not have Jho Low as a client of the firm, but if Jho Low was a small part of a deal, it would be difficult to say to the client he could not be part of it,” O’Flaherty was quoted as saying at the federal court in Brooklyn, New York.
O’Flaherty, who is also co-head of Goldman’s Business Intelligence Group, testified as a prosecution witness against Ng, the sole Goldman banker to go on trial over the epic looting of 1MDB.
Ng has been charged with conspiring with Leissner and Low in the massive fraud.
Leissner, his former boss, has pleaded guilty and is presently cooperating with the US government by becoming its star witness in the case.
O’Flaherty also reportedly told the jury that Low’s name was brought to his attention following Ng’s recommendation.
He also learnt that Goldman’s bankers were considering inking a deal with Low which was later dropped.
O’Flaherty told the jury that he had made queries on Low’s involvement prior to the first 1MDB bond deal, which was reviewed by a firm-wide committee in April 2012.
The query, he said, was made after hearing from a Goldman banker in the Middle East that Low attended a meeting Leissner had in Abu Dhabi with its sovereign wealth fund International Petroleum Investment Co (Ipic) chairman Sheikh Mansour Zayed al Nahyan.
An Ipic subsidiary guaranteed the 1MDB deal.
However, Leissner, he said, denied Low’s involvement.
“He seemed to be irritated with me.
“Leissner was saying Low was not present,” O’Flaherty was quoted as saying.
Testifying further, he told the court that he had warned that Goldman’s investment bankers should not have any role for Low’s side and requested that any payment to intermediaries be declared.
“I was trying to get reassurance that Low was not involved,” he said, adding that none of the Goldman bankers involved in the 1MDB deal had either declared that Low attended the meeting in Abu Dhabi or confirmed his involvement in 1MDB.
Last week, Ng’s lawyers assailed Leissner’s credibility, arguing that it was he who had misled Goldman management over Low’s involvement.
In response to questions from Ng’s lawyer, Marc Agnifilo, O’Flaherty said he had discussed his concerns about Low with Leissner but that he never met or spoke with Ng.
Federal prosecutors have accused Leissner and Ng of concealing from Goldman superiors Low’s role in the scheme and helping the financier pocket at least US$1.42 billion (RM5.96 billion) of US$6.5 billion (RM27.28 billion) in three bond deals and paying tens of millions of dollars in bribes to Malaysian and Abu Dhabi officials.
Low apparently also paid millions of dollars in kickbacks to Leissner and Ng, according to the US government.
In addition, the government argues that Ng recommended that Goldman take Low on as a private client despite knowing about his finances.
The US government in 2019 struck a deal with Low to recover almost US$1 billion of the funds stolen from 1MDB. – The Vibes, March 16, 2022
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