KUALA LUMPUR – Former Goldman Sachs Group Inc banker Tim Leissner had expressed his dismissiveness over a “suspicious shell company” linked to the 1Malaysia Development Bhd (1MDB) by responding that it was not the investment firm’s responsibility to conduct due diligence, a former banker testified, today.
Bloomberg reported, former BSI SA banker Kevin Swamipillai testified to the jury that Leissner had dismissed BSI’s queries on why fees paid to the Abu Dhabi-owned Aabar Investments PJS fund, which guaranteed two of the 1MDB bond deals, were being sent to an offshore shell company instead of the fund itself.
“You have a Middle East sovereign wealth fund that is about to enter into a transaction, but in this case, it involved a shell company in the British Virgin Islands – that was highly unusual,” Swamipillai was quoted saying during the federal court trial of former Goldman banker Roger Hg in Brooklyn, New York, yesterday.
Swamipillai further testified that Low Taek Jho, or Jho Low, the alleged mastermind of the 1MDB, brought business to BSI, including accounts belonging to 1MDB subsidiaries and state-owned Aabar.
BSI, he said, was then asked to do a joint venture between Aabar and the new shell company tied to the first 1MDB bond transaction.
Prior to the first transaction which closed in May 2012, he also pointed out that his colleagues as well as him wanted to know why funds received as a fee for the guarantee by Abu Dhabi’s state-owned International Petroleum Investment Co’s subsidiary Aabar was going into an offshore company.
In an effort to address the Swiss bank’s concerns, Swamipillai told the jury that BSI had invited Leissner and Ng to a meeting in April 2012 at a private dining room at Singapore’s Taste Paradise restaurant.
Swamipillai, however, testified that Leissner had told BSI bankers, who were expecting a presentation from him, that he could only be there for 20 minutes as he had to catch a flight instead.
Leissner, he said, then turned the tables on the BSI bankers, peppering them with questions of his own, taking them off guard.
“Tim Leissner basically dismissed those questions we raised.
“He basically said, ‘due diligence is not Goldman’s responsibility – it’s BSI’s responsibility to conduct its own due diligence’,” he was quoted as saying.
Swamipillai testified while Leissner left, Ng stayed behind but did not speak to him and subsequently left.
Ng’s silence would open up the prosecutor’s argument as an endorsement of Leissner’s attempts to deceive BSI.
Additionally, Swamipillai admitted to the jurors that he had engaged in an unrelated fraud involving 1MDB, adding while Singapore regulators permanently banned him from the industry, he was not prosecuted under criminal charges.
Ng is reportedly charged with conspiring with Leissner and Low to steal billions of dollars from the two bond transactions and a third that followed suit.
Prosecutors say as part of the fraud, Low and others created a fake Aabar entity to divert the funds.
The United States government also says Low then paid tens of millions of dollars to officials in Malaysia and Abu Dhabi as part of the scheme while Ng received at least US$35.1 million (RM146.93 million).
Leissner has since pleaded guilty and is cooperating with the US against Ng. – The Vibes, March 17, 2022
