“We have to prove ownership of the money,” Mahathir, 92, said in an interview with Bloomberg Television’s Haslinda Amin on Friday.
“The previous government, in order to avoid accusation of some wrongdoing, decided that the money was not theirs, so they’re not making any claims. But we know the money is ours. It’s from 1MDB.”
The scandal surrounding the troubled investment company has spawned worldwide investigations, with U.S. officials saying that more than US$4.5bil flowed from 1Malaysia Development Bhd. through a web of opaque transactions and shell companies.
The allegations of corruption helped propel Mahathir’s coalition to a surprise election win in May to oust former Prime Minister Najib Razak, whose coalition had ruled for about six decades.
In the interview, Mahathir raised concern over the large commission paid to Goldman Sachs, which made $593 million for arranging three bond sales for 1MDB. The state fund paid a 10% fee to the bank for its role and accepted a 6% interest rate, he said, adding that the borrowing cost for the government should be closer to 3%.
“What we earned from the debt transactions reflected the risks we assumed at the time, specifically movement in credit spreads tied to the specific bonds, hedging costs and underlying market conditions,” said Edward Naylor, a Hong Kong-based spokesman for Goldman Sachs.
“Comparisons to ‘fees’ from plain vanilla underwritings, which involve far less risk, are not relevant.”
The government would pursue legal action against Goldman Sachs “if there’s a case,” Mahathir said, adding that the attorney general would make a decision on whether to proceed. Finance Minister Lim Guan Eng told the New York Times last week that he would seek restitution from the bank.
Mahathir previously said that Najib would be charged with bribery and embezzlement of public funds. Najib has repeatedly denied wrongdoing, and told Reuters this week that he knows nothing about money from 1MDB appearing in his personal account. Najib’s spokesman couldn’t immediately be reached for comment on Friday.
Charges may be imminent in the renewed probe into 1MDB after Attorney-General Tommy Thomas began reviewing documents submitted by the Malaysian Anti-Corruption Commission. He has set up teams to study possible criminal prosecution and civil proceedings.
The scope of the new investigation includes potential abuse of power by Najib. That includes a probe into fraudulent investments made by 1MDB, funds flowing into his personal account, and criminal breach of trust in a letter of support from the Ministry of Finance, a post that Najib held. - Bloomberg
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