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Showing posts with label Goldman Sachs. Show all posts
Showing posts with label Goldman Sachs. Show all posts

Sunday, February 24, 2019

For the love of our troubled nation in full parade


Casting whining and whinging aside, it's time we pull our socks up, put our best foot forward, and show the world what Malaysia is all about.

IT’S time for Malaysia to change its narrative. For a start, our leaders must end the hyperbole of how the previous Barisan Nasional government stripped and looted the country’s wealth.

We generally know enough about the financial crime of the century, the hunt and arrests of those implicated in the cases.

Datuk Seri Najib Tun Razak and his wife, Datin Seri Rosmah Mansor, are facing a barrage of corruption and money laundering charges, and they are expected to spend the next five years in court.

The main character, the infamous Jho Low, and his family, are on the run, and it’s a given fact that the long arm of the law will eventually reach them.

A corrupt government has collapsed, and it’s now coming to a year since the new federal leaders took charge.

Malaysia can’t continue telling the world how we’re a troubled country with a deep financial hole, and neither should we keep contradicting our stand.

We can’t be saying we’re near bankrupt one day, and the next, concede that our economy is in good shape.

The Pakatan Harapan government marks its first year at office in May. So, its ministers can’t still be whining about inherited problems of a 60-year-old government forever.

Many of the current leaders, including the Prime Minister, were part of the system, and in the case of Tun Dr Mahathir Mohamad, he was at the helm for 22 years, lest we forget.

Admittedly, an eye-watering amount of money has been pilfered, so, the government needs to retrieve what’s stolen.

Ironically, PH was elected to fix these problems.

Malaysia can’t seem like an attractive business proposition with our troubled nation in full parade, especially when investors have many countries to choose from.

The country’s economy for the next two years will be turbulent, but forming the Economic Action Council is a good start to indicate that we intend to tackle the issues together, with public and private participation.

The Prime Minister has made the right move, but the EAC must run fast to come up with confidence-building measures.

Against the backdrop of a challenging environment for global equity markets and a US-China trade war, Malaysia has continued to tread on a steady economic path. It’s slower than we want to, but at least a recession isn’t looming.

Finance Minister Lim Guan Eng must continue his positive tones, as he has finally been doing, to renew confidence both locally and internationally.

The idea of revenue through taxation should be canned, but grumblings among the small base of individual taxpayers is ringing out loud.

It’s unfair to keep scrapping for crumbs from these taxpayers. A more progressive tax regime should be in place. Give it a name if necessary, but importantly, a firmer consumption tax is required because it will be fairer. It’s simple, if you don’t spend, you don’t pay.

In a way, it needs to be balanced out since individuals can’t be paying both income tax and consumption tax.

Lim has taken the right direction to keep selling the messages of how Malaysia has introduced policies and measures to invigorate the capital market.

“Our stock market has remained resilient in comparison with our peers in Singapore, Thailand, Hong Kong and China.

“Amidst large capital outflows among emerging markets and Asean countries this year, the FBM KLCI benchmark index registered a year-to-date decline of 5.8% as at end-November, compared with other Asian markets that have experienced declines ranging from 9.1% to 22.7%.

“And, we are the second-best performing stock market in the Asia Pacific region,” he said recently.

There is other good news which we’ve yet to shout out loud enough for, like Malaysia currently ranking 15 from 190 economies in its facilitation of commerce, according to the latest World Bank annual ratings.

Malaysia’s ranking improved to 15 in 2018 from 24 in 2017. Ease of Doing Business in Malaysia averaged 18.18 from 2008 until 2018, reaching an all-time high of 24 in 2017 and a record low of 6 in 2013, it was reported.

Although we may have lost crucial time, we still have a year to make Malaysia look good because two major events take place next year.

Highlights for 2020 include Malaysia celebrating Visit Malaysia Year, and hosting the Asia Pacific Economic Cooperation (Apec) leaders’ summit, some 22 years after doing so for the first time.

Let’s do it right and make Malaysia proud. It’s not just an occasion befitting Dr Mahathir, but all Malaysians as stakeholders.

The government’s proverbial tale of empty pockets isn’t an excuse anymore. It just doesn’t work that way. If we need to spend, we need to find the money, because we expect a return on investments.

We need to finance-telling a good story internationally, it’s that simple.

However, the lack of momentum to galvanise the nation hasn’t been motivational.

The world doesn’t want to keep hearing our negative stories and neither do Malaysians.

Tell the world we have fixed it and now we’re on the road again.

Come May, and it’ll be crunch time for underachieving ministers.

Everyone invariably tries their best, but those who are unfit just shouldn’t get the nod. After all, the last thing PH needs is painting a picture of a failed administration, but the coalition should be wary of many Malaysians believing the Barisan government fared better.

It’s unfair how some ministers are passing the buck to the PM because they lack the confidence to decide or are just indecisive because the responsibilities of their portfolios exceed their ability.

Visitors to Dr Mahathir’s office have noticed the growing mountain of uncleared documents, which is surely too much a task for anyone, what more a 93-year-old man.

We need to take advantage of the new Malaysia to construct a fresh national narrative which emphasises Malaysia and Malaysians.

There is a need to build national pride over the coming years, one which makes trust and integrity its main framework.

A shared vision beyond 2020 is crucial. Also, to bring Malaysians together and not let race and religion hijack the national discourse.

The question now is, do our leaders have the gumption for this, or will they just let New Malaysia be another piped dream?

By the time world leaders take the stage in KL, Malaysia should be ready to display a new sense of direction, purpose and plan.

Wong Chun WaiWong Chun Wai

Wong Chun Wai began his career as a journalist in Penang, and has served The Star for over 27 years in various capacities and roles. He is now editorial and corporate affairs adviser to the group, after having served as group managing director/chief executive officer.

On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly without a break, except for the occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.

chunwai@thestar.com.my https://twitter.com/chunwai09 http://www.wongchunwai.com/

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Saturday, January 19, 2019

Goldman Sachs must follow up on its apology with US$7.5bil compensation in 1MDB scandal

https://youtu.be/XxwX8CRvSks

Goldman Sachs Group Inc should follow up on its apology to Malaysia with a payment of US$7.5bil (RM30.86bil), says Lim Guan Eng.

The Finance Minister said a mere apology from the investment bank over the scandal-ridden 1Malaysia Development Bhd (1MDB) is not enough, unless they pay reparations and compensation.

Lim said Goldman Sachs should understand the agony and trauma suffered by Malaysians as a result of the scandal.

“An apology is not enough.

“An apology with US$7.5bil is what matters.

“At least he (Goldman Sachs CEO David Solomon) accepted that they have to bear and shoulder some responsibility but that is insufficient.

“They have made provisions of around US$561mil (RM2.3bil) but that is not adequate.

“We are seeking US$7.5bil,” he told a press conference here yesterday after announcing the names of the joint lead arrangers for the Samurai bond.

On Thursday, Solomon apologised to Malaysians for former banker Tim Leissner’s role in 1MDB.

Solomon also said it was very clear that Malaysians were defrau­ded by many individuals, including the highest members of the previous administration.

Asked if Malaysia would drop charges against Goldman Sachs with the US$7.5bil payment, Lim quipped: “US$7.5bil ... then we can discuss lah”.

Lim added that it was very clear who the top government official Solomon was referring to as there could only be one person.

“You worked hand in hand, and there has to be accountability. It also involved a breach in fiduciary duty, and I think the banking industry has this obligation to make good the losses that we suffered.

“I think this is at least an admission.

“If not for the change of government, do you think Goldman will apologise? We’re dealing with the largest investment bank in the world,” he said.

Lim added that he found it distressing that Datuk Seri Najib Tun Razak still refused to admit there was something wrong with 1MDB and the entire exercise.

He also lambasted the former premier for passing the buck to Goldman Sachs, and for being in a state of denial for refusing to admit that Malaysians suffered huge losses due to the scandal.

By Royce Tan The Star

Goldman Sachs CEO apologises for ex-banker’s role in 1MDB scandal



NEW YORK: Goldman Sachs Group Inc chief executive officer David Solomon (pic) has apologised to the Malaysian people for former ban­ker Tim Leissner’s role in 1Malaysia Development Bhd (1MDB) scandal, but said the bank had conducted due diligence before every transaction.

Goldman is being investigated by Malaysian authorities and the US Department of Justice (DOJ) for its role as underwriter and arranger of three bond sales that raised US$6.5bil (RM26.7bil) for the sovereign wealth fund.

US prosecutors last year charged two former Goldman bankers for the theft of billions of dollars from 1MDB. Leissner, a former partner for Goldman Sachs in Asia, pleaded guilty to conspiracy to launder money and violate the Foreign Corrupt Practices Act.

“It’s very clear that the people of Malaysia were defrauded by many individuals, including the highest members of the prior government,” Solomon said on conference call discussing the bank’s fourth-quarter results in a report by Reuters.

Solomon said Leissner denied the involvement of any of Goldman’s intermediaries in transactions with 1MDB.

An attorney representing Leissner did not immediately respond to a request for comment.

Roger Ng, the other charged former Goldman banker, was arrested in Malaysia at the request of US authorities and is expected to be extradited, according to John Marzulli, a spokesman for the prosecution.

The DOJ has said that US$4.5bil (RM18.5bil) was allegedly misappropriated by high-level officials of the fund and their associates between 2009 and 2014.

As part of Goldman’s due diligence efforts, Solomon said the bank sought and received written assurances from 1MDB and International Petroleum Investment Co (IPIC) that no third parties were involved in the first two bond sales.

Abu Dhabi’s IPIC had co-guaranteed the 1MDB bonds when they were issued in 2012.

In the final offering, the Malaysian government itself, along with 1MDB, represented that no intermediaries were involved, he said.

“All these representations to Goldman Sachs have proven to be false,” Solomon said.

Goldman Sachs did not disclose any other information about its involvement with 1MDB, but said the impact on its client franchise had been de minimis. Shares of the bank, which reported strong fourth-quarter results earlier in the day, have fallen over 25% in the last three months, after headlines about its involvement with the sovereign wealth fund emerged.

The Malaysian government said in December it was seeking up to US$7.5bil (RM30.8bil) in reparations from Goldman over its dealings with 1MDB. – Reuters

In an immediate reaction yesterday, former Prime Minister Datuk Seri Najib Tun Razak said Goldman Sachs had to take responsibility because they were appointed and paid by 1MDB to take care of Malaysian’s interests.

“We put up a system, the system was there to take care of our interests, you see.

“So if they fail, then they have to take responsibility, because they were appointed and paid by 1MDB to take care of our interests,” Najib said.- The Star

Related:

 Goldman Sachs  CEO David Solomon apologises for ex-banker's role in 1MDB scandal


Tuesday, December 18, 2018

Malaysia files criminal charges against Goldman Sachs, ex-bankers in 1MDB probe

https://youtu.be/jNJU98b4lzI
Malaysia takes Goldman Sachs to court with AG Tommy Thomas saying that the bank’s dealings with 1MDB broke laws at the heart of the capital markets; MRT Corp will be looking for a new CEO; and Unisem’s offer is “not fair or reasonable”.

This is the first time Malaysian prosecutors have directly targeted Goldman Sachs for its alleged role in the 1MDB scandal © AP

PETALING JAYA: The Attorney-General Chambers has filed criminal charges against subsidiaries of investment bank Goldman Sachs and its key employees over the handling of bonds issued by 1Malaysia Development Bhd (1MDB) totalling USD6.5bil (RM27.2bil).

Attorney general Tommy Thomas said that charges were filed against Goldman Sachs' former Southeast Asia chairman Tim Leissner and former 1MDB employees Jasmine Loo Ai Swan and fugitive businessman Low Taek Jho, also known as Jho Low.

He added that banker Roger Ng Chong Hwa would be charged shortly.

Thomas said Leissner and Ng had conspired with Low, Loo and others to bribe Malaysian public officials in order to procure the selection, involvement and participation of Goldman Sachs in three Bond issuances.

He also said that the Goldman employees had not only received part of the misappropriated bond proceeds, but also received large bonuses and enhanced career prospects at the bank and in the overall investment banking industry.

"The charges arise from the commission and abetment of false or misleading statements by all the accused in order to dishonestly misappropriate USD2.7bil (RM11.3bil) from the proceeds of three bonds issued by subsidiaries of 1MDB, which were arranged and underwritten by Goldman Sachs," he said in a statement on Monday (Dec 17).

Thomas said the three bonds were the 10-year USD1.75bil (RM7.32bil) issued by 1MDB Energy Limited, the 10-year USD1.75bil (RM7.32bil) issued by 1MDB Energy (Langat) Limited and the 10-year USD3bil (RM12.6bil) issued by 1MDB Global Investments Limited.

Thomas added that the investment bank had benefited by receiving underwriting and arranging fees of approximately USD600mil (RM2.5bil), which was higher than market rates and industry norms.

Thomas also said the Offering Circulars and Private Placement Memorandum for the Bonds filed with the Labuan Financial Services Authority had also contained statements which were false, misleading, coupled with omissions of material.

"Offering Circulars and Private Placement Memorandum are serious documents, intended to be relied on, and, in fact, were relied on, by purchasers of the bonds.

"The scheme designed and crafted by the accused to fraudulently structure the bonds for ostensibly legitimate purposes when they knew that the proceeds thereof would be misappropriated and fraudulently diverted by the accused themselves was planned and executed in order to defraud the Government of Malaysia and the purchasers of the bonds," he said.

Thomas said their scheme had contravened Malaysia’s securities laws, particularly, Section 179 of the Capital Markets and Services Act, 2007 (Act 671).

"Malaysia considers the allegations in the charges against all the accused to be grave violations of our securities laws, and to reflect their severity, prosecutors will seek criminal fines against the accused well in excess of the USD2.7bil (RM11.3bil) misappropriated from the Bonds proceeds and USD600mil (RM2.5bil) in fees received by Goldman Sachs, and custodial sentences against each of the individual accused: the maximum term of imprisonment being 10 years," he said.

He said that if no criminal proceedings are instituted against the accused, their undermining of the financial system and market integrity will go unpunished.

“Having held themselves out as the pre-eminent global adviser / arranger for bonds, the highest standards are expected of Goldman Sachs. They have fallen far short of any standard. In consequence, they have to be held accountable,” he said. - The Star.


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Wednesday, August 29, 2012

The US Pacific free trade deal that's anything but free?

The US's draft TPP deal may grant new patent privileges and restrict net freedom, but it's secret – unless you're a multinational CEO

Patent protection increases what patients pay for drugs in the United States by close to $270bn a year (1.8% of GDP). Photograph: Graham Turner for the Guardian

"Free trade" is a sacred mantra in Washington. If anything is labeled as being "free trade", then everyone in the Washington establishment is required to bow down and support it. Otherwise, they are excommunicated from the list of respectable people and exiled to the land of protectionist Neanderthals.

This is essential background to understanding what is going on with the Trans-Pacific Partnership Agreement (TPP), a pact that the United States is negotiating with Australia, Canada, Japan and eight other countries in the Pacific region. The agreement is packaged as a "free trade" agreement. This label will force all of the respectable types in Washington to support it.

In reality, the deal has almost nothing to do with trade: actual trade barriers between these countries are already very low. The TPP is an effort to use the holy grail of free trade to impose conditions and override domestic laws in a way that would be almost impossible if the proposed measures had to go through the normal legislative process. The expectation is that by lining up powerful corporate interests, the governments will be able to ram this new "free trade" pact through legislatures on a take-it-or-leave-it basis.

As with all these multilateral agreements, the intention is to spread its reach through time. That means that anything the original parties to the TPP accept is likely to be imposed later on other countries in the region, and quite likely, on the rest of the world.

Government secrets
 
At this point, it's not really possible to discuss the merits of the TPP since the governments are keeping the proposed text a secret from the public. Only the negotiators themselves and a select group of corporate partners have access to the actual document. The top executives at General Electric, Goldman Sachs, and Pfizer probably all have drafts of the relevant sections of the TPP. However, the members of the relevant congressional committees have not yet been told what is being negotiated.

A few items that have been leaked give us some insight as to the direction of this pact. One major focus is will be stronger protection for intellectual property. In the case of recorded music and movies, we might see provisions similar to those that were in the Stop Online Privacy Act (Sopa). This would make internet intermediaries like Google, Facebook and, indeed, anyone with a website into a copyright cop.

Since these measures were hugely unpopular, Sopa could probably never pass as a standalone piece of legislation. But tied into a larger pact and blessed with "free trade" holy water, the entertainment industry may be able to get what it wants.

The pharmaceutical industry is also likely to be a big gainer from this pact. It has decided that the stronger patent rules that it inserted in the 1995 WTO agreement don't go far enough. It wants stronger and longer patent protection and also increased use of "data exclusivity". This is a government-granted monopoly, often as long as 14 years, that prohibits generic competitors from entering a market based on another company's test results that show a drug to be safe and effective.

Note that stronger copyright and patent protection, along with data exclusivity, is the opposite of free trade. They involve increased government intervention in the market; they restrict competition and lead to higher prices for consumers.

In fact, the costs associated with copyright and patent protection dwarf the costs associated with the tariffs or quotas that usually concern free traders. While the latter rarely raise the price of a product by more than 20-30%, patent protection for prescription drugs can allow drugs to sell for hundreds, or even thousands, of dollars per prescription when they would sell for $5-10 as a generic in a free market.

Patent protection

Patent protection increases what patients pay for drugs in the United States by close to $270bn a year (1.8% of GDP). In addition to making drugs unaffordable to people who need them, the economic costs implied by this market distortion are enormous.

There are many other provisions in this pact that are likely to be similarly controversial. The rules it creates would override domestic laws on the environment, workplace safety, and investment. Of course, it's not really possible to talk about the details because there are no publicly available drafts.

In principle, the TPP is exactly the sort of issue that should feature prominently in the fall elections. Voters should have a chance to decide if they want to vote for candidates who support raising the price of drugs for people in the United States and the rest of the world, or making us all into unpaid copyright cops. But there is no text and no discussion in the campaigns – and that is exactly how the corporations who stand to gain want it.

There is one way to spoil their fun. Just Foreign Policy is offering a reward, now up to $21,100, to WikiLeaks if it publishes a draft copy of the pact. People could add to the reward fund, or if in a position to do so, make a copy of the draft agreement available to the world.

Our political leaders will say that they are worried about the TPP text getting in the hands of terrorists, but we know the truth: they are afraid of a public debate. So if the free market works, we will get to see the draft of the agreement.

Wednesday, May 23, 2012

Facebook price falls !



(Reuters) - Facebook's shares fell again on Tuesday, leaving them down more than a quarter from Friday's highs as questions mounted over the company's financial prospects and its ability to grow fast enough to live up to the hype surrounding its stock.

After Friday's nearly flat close and Monday's 11 percent plunge, the stock dropped as much as 9 percent in early trading on Tuesday before reversing some of the decline.

 

 Facebook shares were down 4 percent at $32.70 just after midday. Volume was again heavy, with more than 66 million shares traded. That followed turnover of 168 million shares Monday and 581 million on IPO day.

"There was a quick rush to exit yesterday, and when it broke the deal price it became self-fulfilling that there was going to (be) additional pressure. That's continuing today even though there's no real news on it," said Michael James, a senior trader at regional investment bank Wedbush Morgan in Los Angeles.

Investors were still shaking their heads over the botched opening trading of Facebook when Reuters reported late Monday that the consumer Internet analyst at lead underwriter Morgan Stanley cut his revenue forecasts for Facebook in the days before the offering.

JPMorgan Chase and Goldman Sachs, which were also underwriters on the deal, each revised its estimates during the road show as well, according to sources familiar with the situation.

One mutual fund source said they had never, in a decade of experience, seen an underwriter cut a company's outlook during the road show prior to an offering.

Brokers, who over-ordered shares expecting supply would be limited, continued to complain they received too much stock to handle. Meanwhile some retail investors were already consulting lawyers.

STILL OVERVALUED?

As bad as the declines have been, a view persists that the stock remains overvalued.

With Monday's closing price of $34.03, the market implied a 24 percent annual growth rate for earnings over the next 10 years -- a rate that would rank above 90 percent of the companies in that industry.

Thomson Reuters Starmine, meanwhile, more conservatively estimates a 10.8 percent annual growth rate, which would value the stock at $9.59 a share, a 72 percent discount to its IPO price of $38.

Similarly, the company's price-to-earnings ratio remains lofty, even after the selloff. The $34.03 price implies a forward P/E of 59, compared with Google's 13.3 forward price-to-earnings ratio (for a similar rate of growth).

TASKMASTER

Investors said the challenge for the young company is to prove it can grow aggressively, to justify its lofty valuation and demonstrate its maturity.

"Wall Street is a severe taskmaster and they're going to want to see quarterly results, then guidance, then subsequently they're going to want to see that guidance beaten, and then the guidance raised," David Rolfe, chief investment officer of Wedgewood Partners, said on Monday evening.

Besides the pressure on Facebook, there is also an intense focus on Nasdaq, which has shouldered much of the blame for trading failures last Friday. The exchange has already set aside money to compensate customers, but some on Wall Street are warning its ability to snag future big IPOs is at risk.

Barry Ritholtz, a widely followed financial blogger and the chief market strategist at Fusion IQ in New York, took all sides -- Facebook, Morgan Stanley and Nasdaq -- to task in the sharpest terms on his blog Tuesday.

"Thus, what we see are a series of bad decisions made by Facebook's executives going back many years. The insiders got greedy, too clever by half, in how they used secondary markets. They picked a bad banker and an awful exchange," Ritholtz said.

 By Edward Krudy and Ryan Vlastelica



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