Malaysia's Mahathir out as PM, as rival Muhyiddin Yassin wins power

Malaysia's Mahathir Mohamad lost a power struggle Saturday with a little-known ex-interior minister to be the country's new prime minister in a shock twist that will return a scandal-plagued party to power.

Muhyiddin Yassin will be sworn in on Sunday, royal officials said, after a week of turmoil that followed the collapse of a reformist government and Mahathir's resignation as premier.

"The process to appoint the prime minister cannot be delayed because the country needs a government for the well-being of the people and the nation," a palace statement said. The king appoints the premier, and rival candidates had this week been seeking to show they commanded majority support from MPs

As well as ending the premiership of Mahathir, at 94 the world's oldest leader, it means there will be little hope of his designated successor Anwar Ibrahim becoming prime minister.

Muhyiddin's coalition is dominated by the multi-ethnic country's Muslim majority, and includes the United Malays National Organisation (UMNO), the scandal-plagued party of disgraced ex-leader Najib Razak.

UMNO was the lynchpin of a long-ruling coalition toppled from power at historic elections in 2018 amid allegations Najib and his cronies looted state fund 1MDB.

Muhyiddin, a former Mahathir ally, had joined forces with UMNO in a bid to win power. His coalition also includes a hardline Muslim party that is pushing for Islamic laws.

- Malaysia in turmoil -

The current crisis began when Mahathir and Anwar's ruling "Pact of Hope" alliance, which stormed to a historic victory two years ago against Najib's government, collapsed a week ago.

A group of ruling coalition lawmakers had joined forces with opposition parties in a bid to form a new government without Anwar and stop him becoming premier. 

After that effort failed, Mahathir and Anwar launched rival bids to win power, reviving a rivalry that has shaped politics for more than two decades in the Southeast Asian nation.

But as Muhyiddin's bid quickly gained support and it became clear that he could get into power with UMNO, Mahathir and Anwar did a volte-face and joined forces again on Saturday.

The remaining parties from the "Pact of Hope" alliance threw their support behind Mahathir to become premier, and there had been hopes he could stop Muhyiddin.

The "Pact of Hope", a ragtag band of opposition groups that included a party dominated by the country's ethnic Chinese minority, Anwar's People's Justice Party and Mahathir's Malay-dominated outfit, was uneasy from the start.

Mahathir had pledged to eventually hand the premiership to Anwar, but many were sceptical he wanted to give power to his old rival, and rival factions were seeking to push Anwar out.

Muhyiddin, 72, was a member of UMNO for many decades and held a string of senior posts. He was deputy prime minister in Najib's government, but Najib sacked him after he voiced criticism of the 1MDB scandal.

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US begins return of $200 million in 1MDB funds to Malaysia

KUALA LUMPUR -- The US government has begun returning to Malaysia some $200 million recovered from asset seizures linked to state fund 1MDB, with about a quarter of the amount already repatriated, the two countries said on Tuesday.

Malaysian and US authorities say about $4.5 billion were allegedly siphoned from 1Malaysia Development Berhad (1MDB), a state fund founded in 2009 by then Malaysian prime minister Najib Razak.

Since losing a general election last year, Najib has been charged with more than 40 criminal offences linked to losses at 1MDB and other state entities. He has pleaded not guilty.

Since 2016, the US Department of Justice, in the biggest ever case in its anti-kleptocracy program, has filed civil lawsuits seeking to seize about $1.7 billion in assets allegedly bought with stolen 1MDB funds, including a private jet, luxury real estate, artwork, and jewelry.

The United States will return to Malaysia about $196 million in the first installment of funds recovered from the asset seizures, US ambassador to Malaysia, Kamala Shirin Lahkdhir, said in a statement.

“We are extremely pleased that this first tranche of assets from this Justice Department investigation is being transferred back to Malaysia, demonstrating the U.S. commitment to return these assets for the benefit of the people of Malaysia,” she said.

So far, $57 million has been returned to Malaysia following a settlement reached with Hollywood film production company Red Granite Pictures, which is linked to Najib's stepson Riza Aziz, Malaysia's Attorney General Tommy Thomas said in a statement.

Red Granite had paid the US government $60 million in September 2017 to settle a civil forfeiture claim over the rights to the 2013 Oscar-nominated film The Wolf of Wall Street, which the DoJ says was financed with 1MDB funds.

A deduction of $3 million from the settlement was made to reimburse costs incurred by US authorities in "investigating, seizing, litigating and securing settlement of the Red Granite funds," Thomas said.

The DoJ is also in the process of remitting another $139 million, pending the sale of a Manhattan property linked to fugitive Malaysian financier, Low Taek Jho or Jho Low, Thomas said.

Low is facing criminal charges in Malaysia and the United States over his alleged central role in the 1MDB case. He has consistently denied wrongdoing and his whereabouts is unknown.

The latest money returned by the United States brings the total amount recovered by Malaysia to $322 million. This includes $126 million from the sale of a 300-foot luxury yacht allegedly bought by Low with 1MDB funds, Thomas said.

Singapore authorities have also ordered a separate return of S$50 million ($36.70 million) in 1MDB-linked funds to Malaysia, he added.

At least six countries, including the United States, Singapore and Switzerland, are investigating alleged graft and money laundering at 1MDB.

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Malaysia to sell 1MDB-linked luxury yacht for $126-M

KUALA LUMPUR - Malaysia will sell a superyacht allegedly bought with stolen funds from state fund 1MDB to casino operator Genting Malaysia Bhd for $126 million, in the first major asset sale by Kuala Lumpur to recover billions lost from the fund.

The superyacht Equanimity is among assets allegedly bought by fugitive financier Low Taek Jho and his associates with money taken from the fund, U.S. and Malaysian investigators have said.

Jho Low, as he is known, allegedly paid $250 million for the 300-ft (91-m) yacht, which has an interior clad in marble and gold leaf, a spa and sauna, a 20-metre swimming pool, a movie theatre and helipad.

Malaysia set a minimum price tag of $130 million when it put the yacht up for sale in October, but had struggled to find a buyer.

"Many offers were received...and a few were over $100 million," Attorney General Tommy Thomas said in a statement on Wednesday, adding that Genting would pay the $126 million by the end of April.

The government would save $4.4 million in agent's commission since it negotiated directly with Genting Malaysia, he added.

A spokesman for Low called the sale "a failed PR stunt", saying Malaysia had accepted a "bargain basement sale price".

In a statement, Genting said the acquisition would give it "a unique and competitive edge for its premium customers business." The purchase will not affect 2019 earnings, it said.

1MDB, founded by former prime minister Najib Razak, is being investigated by at least six countries for money laundering and corruption.

The U.S. Department of Justice has said about $4.5 billion siphoned from 1MDB was used by Low and his associates to buy the yacht, a private jet, as well as Picasso paintings, jewellery, and real estate.

Prime Minister Mahathir Mohamad, after his stunning victory in last year's election, has vowed to recover the money allegedly stolen from 1MDB.

Malaysian police have issued an arrest warrant and filed criminal charges against Low, but his whereabouts are unknown.

Low has repeatedly denied wrongdoing. 

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Goldman Sachs CEO apologizes to Malaysia over 1MDB

NEW YORK -- The head of Goldman Sachs on Wednesday apologized to Malaysia for a Goldman partner's role in the 1MDB scandal even as he defended the firm as a whole.

Goldman Chief Executive David Solomon reiterated during an earnings conference call that the investment bank was cooperating with authorities on the probe of the Malaysian sovereign wealth fund as he expressed regret over a scandal that has roiled the Asian country.

In November, the Justice Department announced that former Goldman partner Tim Leissner had pleaded guilty to violating US anti-bribery and money laundering laws and agreed to pay $43.7 million in restitution.

"It's very clear that the people of Malaysia were defrauded by many individuals including the highest members of the prior government," said. "Per Leissner's role in that fraud, we apologize for the Malaysian people."

But Solomon also defended the bank as a whole, saying it had been misled by Leissner and senior officials in the Malaysian government about the role of a key intermediary in the scandal, Low Taek Jho.

Goldman helped arrange $6.5 billion in bonds for 1MDB. Kuala Lampur has filed criminal charges against Goldman and two former employees for alleged theft.

A Justice Department indictment of Low Taek Jho and Ng Chong Hwa, another ex-Goldman banker, that identified Goldman as "Financial Institution #1" said the firm's business culture at times emphasized dealmaking "ahead of the proper operation of its compliance functions."

Solomon said employees at Goldman were "extremely angry" about Leissner's role but that morale was good on the whole due to the bank's strong financial performance. 

Goldman has suffered a "reputation dent" tied to the scandal, Solomon acknowledged, but added that the effect on clients had been "de minimus."

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Malaysia files criminal charges against Goldman Sachs in 1MDB probe

KUALA LUMPUR, Malaysia -- Malaysia said on Monday it has filed criminal charges against Goldman Sachs and two of the US bank's former employees in connection with a corruption and money laundering probe at state fund 1MDB.

Goldman Sachs has been under scrutiny for its role in helping raise funds through bond offerings for 1Malaysia Development Bhd (1MDB), which is the subject of investigations in at least six countries.

Malaysia's Attorney General Tommy Thomas said criminal charges under the country's securities laws were filed on Monday against Goldman Sachs, its former bankers Tim Leissner and Roger Ng, former 1MDB employee Jasmine Loo and financier Jho Low in connection with the bond offerings.

"The charges arise from the commission and abetment of false or misleading statements by all the accused in order to dishonestly misappropriate $2.7 billion from the proceeds of three bonds issued by the subsidiaries of 1MDB, which were arranged and underwritten by Goldman Sachs," Thomas said in a statement. 

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Goldman Sachs bankers 'cheated' Malaysia over 1MDB, Mahathir says

SINGAPORE - Malaysian Prime Minister Mahathir Mohamad said Wednesday bankers at Goldman Sachs Group Inc "cheated" the country in dealings with state fund 1MDB and that US authorities have promised to help return the fees the Wall Street bank earned from the fund.

The US investment bank has been under scrutiny for its role in helping raise funds through bond offerings for 1Malaysia Development Bhd (1MDB), which is the subject of corruption and money-laundering investigations in at least 6 countries.

Goldman's stock fell to a near 2-year low on Monday after Malaysian Finance Minister Lim Guan Eng said his country would seek a "full refund" of the around $600 million in fees the bank earned from raising $6.5 billion for the fund. The stock eased 0.5 percent on Tuesday.

A Goldman Sachs spokesman on Monday said in an email to Reuters that the bank denied any wrongdoing.

The US Department of Justice (DOJ) has said about $4.5 billion was misappropriated from 1MDB, including some money that Goldman Sachs helped raise, by high-level officials of the fund and their associates from 2009 through 2014.

US prosecutors filed criminal charges against 2 former Goldman Sachs bankers earlier this month. One of them, Tim Leissner, pleaded guilty to conspiracy to launder money and conspiracy to violate the Foreign Corrupt Practices Act.

"There is evidence that Goldman Sachs has done things that are wrong," Mahathir said in an interview with US news channel CNBC aired on Tuesday.

"Obviously we have been cheated through the compliance by Goldman Sachs people," he said, without specifying details.

The bank's compliance controls "don't work very well", he added.

A second Goldman Sachs spokesman in Hong Kong declined to comment on Mahathir's comments in the interview.

Asked by reporters later in Singapore if he had officially requested the DOJ to help return money that Goldman earned from 1MDB, Mahathir said: "It takes a little bit of time but they (DOJ) have promised that they will give back the money." He was speaking on the sidelines of a summit in Singapore.

A DOJ spokeswoman said the United States continued to pursue justice with respect to its 1MDB investigations. Whenever possible, recovered assets would be used to "benefit the people" harmed by corruption and abuse of office, she added.

Anwar Ibrahim, appointed successor to 93-year-old Mahathir, told parliament on Tuesday that Malaysia needed to take "more aggressive measures" to reclaim the fees and losses due to the harm the scandal had done to the country's image.

Finance Minister Lim told reporters the country would seek consequential losses as well as the return of fees.

"The Malaysian government will want to reclaim all the fees paid, as well as all the losses including the interest rate differential," Lim told reporters. He said the rate Malaysia had paid was about 100 basis points higher than the market rate.

Critics have said the fees earned by Goldman Sachs were far in excess of the normal 1-2 percent a bank could expect for helping sell bonds.

Goldman has said the outsized fees related to additional risks: it bought the unrated bonds while it sought investors and, in the case of a 2013 bond deal which raised $2.7 billion, 1MDB wanted the funds quickly.

Citing sources, Reuters reported in June that Malaysia was considering asking the DOJ to get Goldman Sachs to return the fees it had earned from the 1MDB deals.

The 1MDB scandal was a major reason for former premier Najib Razak's shock election loss in May. He has been charged with corruption over the scandal and has pleaded not guilty.

Malaysian financier Low Taek Jho, described by US and Malaysian authorities as central to the 1MDB fraud, was charged by US prosecutors this month. He remains at large.

source: news.abs-cbn.com

More than $1-B transferred into Malaysia PM's accounts: WSJ

KUALA LUMPUR - Deposits into Malaysian Prime Minister Najib Razak's bank accounts ran to hundreds of millions of dollars more than previously identified by probes into state fund 1Malaysia Development Berhad, the Wall Street Journal reported on Monday.

Citing two unnamed people familiar with flows into Najib's accounts and a person familiar with one overseas investigation, the report said that more than $1 billion was deposited from 2011 to 2013, far more than the $681 million earlier identified.

The paper said global investigators believe much of the $1 billion originated with the state fund, known as 1MDB, but did not specify where the extra money came from or what happened to it.

The report contradicts a conclusion reached recently by Malaysia's chief law officer.

Attorney-General Mohamed Apandi Ali cleared Najib in January of any corruption or criminal offences, saying the $681 million transferred into Najib's account was a gift from a member of Saudi Arabia's royal family and that most of it was returned.

A government spokesman said Malaysian authorities had gone to Saudi Arabia to "examine documentation" and interviewed members of the royal family and officials who handled the donations.

"As stated by the attorney-general of Malaysia, the funds received were a donation from Saudi Arabia," the spokesman said in a statement in response to the latest report.

Najib has been buffeted for months by allegations of graft and financial mismanagement at debt-burdened 1MDB and in particular by revelations of the transfer of around $681 million into his account in 2013.

He has denied wrongdoing, saying the funds were a legal political donation and he did not take any money for personal gain.

The Wall Street Journal report said money beyond the $681 million arrived in Najib's account in 2011 and 2012.

It said investigators in two countries believed funds originated from 1MDB and moved through a complex web of transactions. Najib is chairman of the board of advisors to IMDB, a fund set up in 2009, when he came to office, to invest in projects of national importance.

In response to the WSJ report, 1MDB said it has consistently maintained that it has not paid any funds to the personal accounts of the Prime Minister.

"This has been reiterated by multiple lawful authorities including the Malaysian Anti-Corruption Commission, the Malaysian Attorney General, and various reputable international publications, who have confirmed that these funds came from Saudi Arabia," it said in an email response.

Probes into the fund's finances have been opened in Malaysia, the United States, Switzerland, Hong Kong, Singapore and Abu Dhabi, the Wall Street Journal said. (Reporting by Rozanna Latiff; Editing by John Chalmers and Alex Richardson)

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