1MDB scandal origins linked to Goldman bankers' lunch in Singapore

About US$577m was syphoned from a bond sale that was discussed in a restaurant.

Bloomberg reports that some of the origins of Malaysia’s 1MDB scandal could be traced to a private lunch in Singapore’s Taste Paradise restaurant between two Goldman Sachs Group bankers.

During this lunch in May 2012, bankers Roger Ng and Tim Leissner were explaining a US$1.75b bond offering to six executives of a Swiss bank. 1MDB hired Goldman Sachs to underwrite the bond sale.

Now, investigators from Singapore to the US are looking at the roles of Ng and Leissner. They are examining how the bond sale’s proceeds worth US$577m ended up a day later in an account at BSI SA in Switzerland, the bank where the said executives are from.

The lunch was the culmination of numerous conversations as BSI bankers and compliance officials sought clarity on the deal. The account belonged to a British Virgin Islands entity known as Aabar Investments PJS Ltd., which US court documents say was used to syphon off about US$1.4b from two 2012 bond sales, including the offering discussed at the lunch.

Leissner, Goldman’s former chairman of Southeast Asia and lead banker for three 1MDB bond sales, is now barred from practicing finance in Singapore and the US. Prosecutors in Malaysia and Singapore are turning their attention to Ng who introduced several parties central to the scandal, people with knowledge of the matter said.

Read the full report here.